Micro 2.2 Supply and Demand (Economics)

The video tutorial covers key economic concepts of equilibrium and disequilibrium in supply and demand. It explains the law of demand and supply, showing how they interact to form price equilibrium. The tutorial further explores scenarios of surplus and shortage, illustrating consumer and producer behaviors when prices are too high or too low.

What is the relationship between price and quantity demanded according to the law of demand?

• Exponential relationship

• Inverse relationship

• No relationship

• Direct relationship

What happens when the price is set too high in a market?

• A shortage occurs

• Equilibrium is achieved

• A surplus occurs

• Demand increases

In a surplus situation, how do producers typically respond?

• They lower prices

• They produce more

• They produce less

• They increase demand

What is the result when the price is set too low in a market?

• A surplus occurs

• A shortage occurs

• Supply increases

• Equilibrium is achieved

How do consumers typically react to lower prices in a market?

• They buy less

• They buy more

• They save more

• They sell more