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How does price serve as an incentive for producers and consumers in the market?
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A market informs producers and consumers through what?
price...
Why are price floors and price ceilings posed?
if the market price imposed by suppliers are too high for consumers then the price ceilings are imposed....if the market price is too low for the producers then price floors is imposed.
In a market economy a high price will usually cause?
producers to supply more and consumers to buy less.
What is Rationing as a function of price mechanism?
This is when consumers and producers respond to information( signalling) and incentive provided by the prices then scarce resources will be rationed between competing uses
True or false On the supply side of a market producers indicate to consumers what they are willing to sell in what quantity and at what price?
true
A market informs producers and consumers through what?
price...
What is the point at which producers and consumers agree on a price to sell and buy?
market
Why are price floors and price ceilings posed?
if the market price imposed by suppliers are too high for consumers then the price ceilings are imposed....if the market price is too low for the producers then price floors is imposed.
In a market economy a high price will usually cause?
producers to supply more and consumers to buy less.
What is Rationing as a function of price mechanism?
This is when consumers and producers respond to information( signalling) and incentive provided by the prices then scarce resources will be rationed between competing uses
True or false On the supply side of a market producers indicate to consumers what they are willing to sell in what quantity and at what price?
true
How will consumers to the incentive of a higher price on a good service?
The negative incentive will cause consumers to purchase less of a good or service if it is of lower quality
When does market equilibrium happen?
At market equilibrium, the price and quantity demanded are at a point where they will not vary much. Consumers are unwilling to buy the good at a higher price. Producers are unwilling to produce anymore goods at the same price.
How will consumers react to the incentive of a higher price on a good or services?
The negative incentive will cause consumers to purchase less of a good or service if it is of lower quality
What are the advantages and disadvantages of price discrimination to consumers and producers?
An advantage to price discrimination to producers is that firms will be able to increase sales. A disadvantage to consumers is that it can cause things to cost more.
Do the interactions between the producers and the consumers establish price?
true
What are the disadvantages of price mechanism?
dcb Miami FL Advantages: (1) The market gives producers an incentive to produce goods that consumers want. (2) The market provides an incentive to acquire useful skills. (3) The price system encourages producers and consumers to conserve scarce resources. (4) Competition pushes businesses to be efficient: keeping costs down and production high. (5) The market system involves a high degree of economic freedom. Disadvantages: (1) A private market economy may be quite unstable (unemployment, inflation, growth) (2) Business may simply satisfy the wants they have created through advertising. (3) Prices may give false or inadequate signals to producers and consumers (externalities, like pollution). (4) Markets just do not work in some areas (public goods, such as national defense). (5) Monopolistic industries may restrict output and drive up prices. (6) Market economies tend to produce a skewed distribution of income (large gap between the rich and the poor).
