2.2 The Market Mechanism Equilibrium(or market-clearing)price-Price that equates the quantity supplied to the quantity demanded. >Market mechanism-Tendency in a free market for price to change until the market clears. >Surplus-Situation in which the quantity supplied exceeds the quantity demanded. >Shortage-Situation in which the quantity demanded exceeds the quantity supplied. 2.2 The Market Mechanism ➢ Equilibrium(or market-clearing)price-Price that equates the quantity supplied to the quantity demanded. ➢ Market mechanism-Tendency in a free market for price to change until the market clears. ➢ Surplus-Situation in which the quantity supplied exceeds the quantity demanded. ➢ Shortage-Situation in which the quantity demanded exceeds the quantity supplied