Equilibrium Cheat Sheet

by Natalie Moore (NatalieMoore) via cheatography.com/19119/cs/2236/

Economic equili​brium Key equili​brium terms Effect of an increase in demand / shortage

Economic equili​brium is a state where Compet​it In a compet​​itive equili​​brium, supply

economic forces such as supply and demand ive equals demand.
are balanced and in the absence of external equili​briu
influences the (equil​ibrium) values of economic m
variables will not change.
Ceteris Requires that when analysing the
Paribius relati​​onship between two variables
Price is above market equili​brium 'all else all else must be held constant.
being
Surplus. Higher supply than demand.
equal'
Equili​brium price falls
Market A condition where a market price is
Equili​brium qty rises
equili​briu establ​​ished through compet​​ition
Happens if new tech released or new firm m such that the amount of goods or
enters market services sought by buyers is equal
Properties of equili​brium
to the amount of goods or services
Price below market equili​brium offered by sellers. Three basic properties of equili​brium in general
Compet​it A market equili​brium with many proposed by Huw Dixon:
Shortage. Higher demand than supply.
ive buyers and many sellers P1 The behavior of agents is consis​tent.
Equili​brium Price rises
market
P2 No agent has an incentive to change its
Equili​brium qty falls equili​briu
behavior
m
Demand curve shifts to the right
P3 Equili​brium is the outcome of some
Surplus Qty supplied > qty demanded. Price
Maybe because incomes have increased or dynamic process (stabi​lity).
is above equili​brium.
population has grown.
Shortage Qty supplied < qty demanded. Price Comple​mentary goods
Effect of an increase in supply / surplus is below equili​brium
Comple​mentary goods: price change of one
effects quantity demanded of the other.

Price increasing on See surplus

compli​mentary

Price decreasing on See

compli​mentary shortage

By Natalie Moore Published 15th June, 2014. Sponsored by CrosswordCheats.com

(NatalieMoore) Last updated 13th May, 2016. Learn to solve cryptic crosswords!
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