II. Equilibrium - where supply and demand curves intersect

1. Qd equals Qs
2. The market is "at rest" or in balance

III. Equilibrium Price - the price paid at the equilibrium point

IV. Surplus - Qs is greater than Qd

A. occurs when price is above equilibrium point

V. Shortage - Qd is greater than Qs

1. occurs when price is below equilibrium point

VI. Changes in Equilibrium Price

1. Demand

0. increase in demand = increase in equilibrium price
1. decrease in demand = decrease in equilibrium price

1. Supply

0. increase in supply = decrease in equilibrium price