January 20 2017
Excess Demand

Excess demand: quantity demanded is greater than quantity supplied (shortage). Ex: flu shots at Walgreen's

Shortage: consumers can't get quantity of items they desire

Equilibrium: Point at which supply/demand curve intercept

Price ceiling: occurs when government puts a legal limit on how high the price of a product can be. (must be set below the equilibrium mark to be efficient)

Excess supply: quantity supplied is greater than quantity demanded (surplus)

Surplus: when the producers have inventory they can't get rid of.

Price Floor: Lowest legal price a commodity can be sold at. (Used by government to prevent prices from becoming too low) ex: minimum wage.