Supply and Demand Chapter 18 Check 3 Yeee haaa!!! I love notes!!!! Write everything in yellow. That will pretty much be everything.

Draw this chart on your paper

A Demand Schedule -How much consumers are willing to buy at various prices

A Supply Schedule -How much sellers are willing to sell at various prices

Equilibrium -Point of balance between price and quantity

buyers will find on shelves at equilibrium….. -There will be ample supply on shelves

firms/businesses will find at equilibrium…. -There will be enough buyers for their goods

Disequilibrium occurs when… -When quantity supplied is not equal to quantity demanded

Excess Demand is…. -Quantity demanded is more than the quantity supplied

What will happen to customers at excess demand? -They will have to wait in long lines or not get the product they want

What should a business do at excess demand? -Increase the price

Excess Supply -Quantity supplied exceeds the quantity demanded

The cause of excess supply.. -High prices or excess or over production

What will customers do at excess supply? -Buy less or buy an alternative

Price Ceiling -Maximum price set by law that sellers can charge for a good or service

An example of a price ceiling is... -Rent Control, can only charge so much

problems that price ceilings cause -Reduces quantity and quality -Waiting lists, discrimination, and bribery

Price Floors -Minimum price set by the government that must be paid

Example….. -Minimum Wage

if price floors are set wrong…… -Decrease in employment and benefits -Prices of products increase sharply

The government tried to work price floors into agriculture in past years… -Minimum price set, but if it goes below then the government creates demand by purchasing excess crops

Now, a better idea…. -Provides emergency financial aid to farmers