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The expectations theory and the segmented markets theory do not explain the facts very well,but they provide the groundwork for the most widely accepted theory of the term structure of interest rates,
Equilibrium Price
A price point in the market where the supply of goods meets the demand for them.
Equilibrium Quantity
The quantity of goods or services that is supplied and demanded at the market equilibrium price.
Producer Surplus
The difference between the amount a producer is willing to accept for a good or service and the actual amount received by them when the good or service is sold.
Total Surplus
A combination of consumer and producer surplus that signifies the overall net advantage to society from the consumption and production of a good or service.
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