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eleanor.adamandi
Mind Map by , created more than 1 year ago

This mindmap outlines visually the main components of the economic concept of Equilibrium

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jackexamtime
Created by jackexamtime over 11 years ago
eleanor.adamandi
Copied by eleanor.adamandi over 11 years ago
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EquilibriumWhat is equilibrium?A price at which it is ensured that exactly everything thatis produced (supplied) is purchased (demanded)Equilibrium price and quantity are determined by demand and supplyIt occurs on the Demand/Supply graph where thedemand curve intersects with the supply curveExcess DemandThis occurs when the price is below the equilibrium price - price is solow that the quantity demanded exceeds the quantity suppliedCompetition will eventually force price upwards towards equilibriumpriceExcess SupplyThis occurs when the price is set above the equilibrium price -the price is too high for all the quantity supplied to bepurchasedEventually, excess supply will put downward pressure on the sellingpriceChanges in DemandIncreased DemandResults in an increase in equilibrium price and quantityDecreased DemandResults in a decrease in equilibrium price and quantityDouble click this nodeto edit the textClick and drag this buttonto create a new node