The document discusses economic surpluses and shortages. A surplus occurs when the quantity supplied exceeds quantity demanded, resulting in excess supply. A shortage happens when quantity demanded is greater than quantity supplied, creating excess demand. It also outlines how changes in supply and demand impact equilibrium price and quantity, noting that an increase in demand or supply raises quantity but demand increases raise price while supply increases lower price.

1. Presented By:
Anand Singh Tomar
DM17B04
PGDM - 2

2. “A surplus exists
at a market price
when the quantity
supplied exceeds
the quantity
demanded.” (i.e.,
excess supply)
“A shortage exists
at a market price
when the quantity
demanded
exceeds the
quantity supplied.”
(i.e., excess
demand)
SURPLUS
SHORTAGE

3. “When demand increases, equilibrium price and quantity both increase.”

4. “When demand decreases, equilibrium price and quantity both decrease.”

5. When supply increases, equilibrium price decreases and quantity increases.

6. When supply decreases, equilibrium price increases and quantity decreases.