16 terms

Chapter 6 Economics: Demand, Supply and Prices

Miramonte High School; Mr Hunter Period 3
market equilibrium
occurs when the quantity demanded and the quantity supplied at a particular price are equal
equilibrium price
the price at which the quantity demanded and supply are equal
the result of quantity supplied being greater than quantity demanded
the result of quantity demanded being greater than quantity supplied
occurs when quantity demanded and quantity supplied are not in balance
competitive pricing
occurs when producers sell products at lower prices to lure customers away from rival producers, while still making a profit
encourages people to act in certain ways
price ceiling
the legal maximum price that sellers may charge for a project
price floor
a legal minimum price that buyers must pay for a product
minimum wage
a legal minimum amount that an employer must pay for one hour of work
a government system for allocating goods and services using criteria other than price
black market
involves illegal buying or selling in violation of price controls or rationing
4 Characteristics of Price System
1. Neutral
2. Market driven
3. Flexible
4. Efficient
2 Advantages of the Price System for Producers
1. Information
2. Motivation
Michael Dell
- Dell computers
-cut costs by cusotm-making computers
Office of Price Administration
Started in 1941 during WW2 to ration scarce goods