Learning objectives
Define market equilibrium and disequilibrium and explain how excess demand and excess supply are removed by price changes
Calculate equilibrium price and quantity, and the size of a shortage or surplus at a given price, from linear demand and supply equations
Analyse the effects of single and simultaneous shifts in demand and supply on equilibrium price and quantity
Analyse links between markets through joint demand (complements), alternative demand (substitutes), derived demand and joint supply
Explain the rationing, signalling and incentive functions of price in allocating resources
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