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TOTAL PRODUCT AND AVERAGE PRODUCT: A graphical connection between total product curve and average product curve stating that the slope of a line between the origin and any point on the total product curve is equal to the average product. Imagine a ray shooting out of the origin and hitting the total product curve. As this ray hits each point on the curve, remaining anchored at the origin, the slope of the ray changes. And the slope of this ray is average product.
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                           DISEQUILIBRIUM PRICE: A price that does not achieve equilibrium in the market. A disequilibrium price is either above or below the equilibrium price. A price below the equilibrium price creates a shortage and a price above the equilibrium price creates a surplus. In both case, the market imbalance prompts the price to change, moving toward the equilibrium price. A disequilibrium price is any price that does not achieve a balance between the market forces of demand and supply. More specifically, the quantity demanded is not equal to the quantity supplied. If quantity demanded exceeds quantity supplied, then a shortage exists. If quantity supplied exceeds quantity demanded, then a surplus exists.Out of Balance| The 8-Track Tape Market |  |
Disequilibrium prices that create surpluses and shortages can be illustrated using the market for 8-track tapes displayed in this exhibit. This graph was generated after long hours attending the 88th Annual Trackmania 8-Track Tape Collectors Convention at the Shady Valley Exposition Center.- 30 Cent: Consider first how a shortage is created at a 30 cent price. Click the [30 Cent] button to highlight this price. At 30 cents, the quantity demanded is 600 tapes and the quantity supplied is 200 tapes. This price does not generate equilibrium. The buyers want to buy 600 tapes, but only 200 tapes are offered for sale by the sellers. This shortage motivates buyers to offer a higher price.
- 70 Cent: Now consider how a surplus is created at a 70 cent price. Click the [70 Cent] button to highlight this price. At 70 cents, the quantity demanded is 200 tapes and the quantity supplied is 600 tapes. This price does not generate equilibrium, either. The sellers want to sell 600 tapes, but only 200 tapes are being purchased by the buyers. This surplus motivates sellers to charge a lower price.
For sake of completeness and for purposes of comparison, the equilibrium condition in the market can be identified by clicking the [Equilibrium] button. Doing so reveals an equilibrium price of 50 cents and an equilibrium quantity (without shortage or surplus) of 400 tapes.
Recommended Citation:DISEQUILIBRIUM PRICE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2021. [Accessed: May 11, 2021].
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PINK FADFLY
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Today, you are likely to spend a great deal of time looking for a downtown retail store looking to buy either decorative garden figurines or a wall poster commemorating last Friday (you know why). Be on the lookout for rusty deck screws.
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More money is spent on gardening than on any other hobby.
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"Everyone is bound to bear patiently the results of his own example. " -- Phaedrus, Philosopher
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M2
M1 plus savings types of near monies, including savings deposits, certificates of deposits, money market deposits, repurchase agreements, and Eurodollars
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