Equilibrium

        I.            The point at which the supply curve intersects with the demand curve. Still efficient

      II.            Excess Demand: occurs when quantity demanded is greater than quantity supplied.

i.        QD>QS.

ii.      A shortage.

    III.            Price ceiling: When the State puts a legal limit on how high a price of a product can be.

i.        Found under the equilibrium point. Also a shortage.

ii.      State sets a limit on flu shots. Eventually the supply will run out.

iii.    Shown by the gap of the ceiling between supply and demand lines on the y-axis.

    IV.            Excess Supply: quantity supplied is greater than quantity demanded.

i.        QS>QD

ii.      A surplus

iii.    Producers have inventories that they cannot rid. Creates a price floor

      V.            Price Floor: the lowest legal price a commodity can be sold at.

i.        Minimum wage. Can't remain competitive.