AP Microeconomics / Unit 2: Supply and Demand
2.7 Market Disequilibrium and Changes in Equilibrium
Notes
- Price above equilibrium → surplus → price falls. Below → shortage → price rises.
- When both curves shift, one of price or quantity is indeterminate.
Practice
Demand increases and supply decreases. Which is certain?
Both push price up.
At a price above equilibrium there is a:
Quantity supplied > demanded.
A shortage tends to cause:
Buyers bid up prices.
Ready for more? Take the Unit 2 test.