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According to Adam Smith what happens when the supply of a good decreases?
Wiki User
∙ 9y ago
The price increases-
Wiki User
∙ 9y ago
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According to Adam Smith what happens when the supply of a product increases?
The price decreases.
According to Adam Smith what happens when demand for a good increases?
The supply decreases.
According to Adam Smith what will happen when the demand of a good increases?
The price decreases.
What will happen when the supply of a product increases According to Adam Smith?
the price of the product will decrease
What are two factors that regulate a marketplace according to Adam smith?
Supply and demand are the 2 factors that regulate a marketplace.
According to Adam Smith what happens when the supply of a product increases?
The price decreases.
According to Adam Smith what happens when demand for a good increases?
The supply decreases.
According to Adam smith What happens when demand for a product decreases?
Supply increases.
What happens when the supply of product decreases according to Adam smith?
The price increases
According to Adam smith what happen when the demand for a product decreases?
Supply increases.
According to Adam smith what happened when the supply of product increases?
The price decreases.
According to Adam Smith what will happen when the demand of a good increases?
The price decreases.
What will happen when the supply of a product increases According to Adam Smith?
the price of the product will decrease
What will happen when the demand for a product increases according to Adam Smith?
Supply increases.
What are two factors that regulate a marketplace according to Adam smith?
Supply and demand are the 2 factors that regulate a marketplace.
According to Adam smith how should wages and prices be regulated?
Adam Smith believed that wages and prices should be regulated by the forces of supply and demand in a free market economy. He argued that competition among employers and workers would naturally adjust wages and prices to levels that reflect the true value of goods and services. This concept is known as the invisible hand of the market.
According to Adam Smith what will happen when the supply of a good decreases?
Adam Smith wrote that when the supply of a good decreases the price should in theory, rise. This is called the law of supply and demand. Conversely, when the supply of a particular good increases, the price of the good will in theory fall. The theory of supply and demand is commonly examined in the commodities market where the supply and demand of raw materials is always affected by things like drought or flood or even war. When drought ruins a crop like wheat, then the supply in general is limited, and the price of a loaf of bead will be expected to rise in the near term. The real estate boom that started in the late nineties was caused by an abundance of buyers with easy credit, chasing a limited supply of housing. As such, the prices kept rising to meet the demand for the limited supply. As a result, we had a bubble of inflated real estate that was bound to bust when the law of supply and demand turned around due to a reduction in available buyers. This resulted from a tightening credit market. When the market started collapsing, it was because there was an over-abundance of supply (of homes) which as the law postulated, drove down prices. This is why we had a collapse of home prices.
