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Prices will fall when the demand is much lower than the supply. When the supply is lower, there is greater demand, therefore, the prices will rise.

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What does an increase in supply of an item usually mean for a consumer?

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What happens to prices in a free competitive market?

In a free competitive market, prices are determined by supply and demand. When demand for a product or service is high and supply is limited, prices tend to increase. Conversely, when demand is low and supply is abundant, prices tend to decrease. This dynamic process of supply and demand helps to ensure that prices in a free competitive market are set at a level that reflects the true value of goods and services.


How does a change in the amount of a product lead to a shift in equilibrium, and can you explain this process?

A change in the amount of a product can lead to a shift in equilibrium by affecting the supply and demand balance. If the amount of a product increases, the supply will exceed the demand, causing prices to decrease. This can lead to a new equilibrium point where supply and demand are once again balanced at a lower price. Conversely, if the amount of a product decreases, the demand may exceed supply, causing prices to increase. This can lead to a new equilibrium point where supply and demand are balanced at a higher price.


When according to the law of supply and demand when supply increases what else happens?

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Use economic theory to explain why there might be such a range of prices in airline tickets?

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How are prices determined in a well functioning economy?

By simple supply and demand theory. The more demand, or the less supply, will lead to higher prices. The less demand, or more supply, will lead to lower prices.


How does the interaction between supply and demand determine prices in a market?

The interaction between supply and demand in a market determines prices. When demand for a product is high and supply is low, prices tend to increase. Conversely, when supply is high and demand is low, prices tend to decrease. This balance between supply and demand helps establish the market price for a product or service.


How is today's gold prices increase or decrease?

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Who determines prices?

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What determines the prices of goods and services in the product market?

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What is in a free enterprise economy supply and demand affect the of a product?

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How does the concept of supply and demand influence pricing in the market?

The concept of supply and demand influences pricing in the market by determining the equilibrium price at which the quantity of goods or services supplied equals the quantity demanded. When demand exceeds supply, prices tend to rise, and when supply exceeds demand, prices tend to fall. This dynamic interaction between supply and demand helps establish market prices.