0
What happens if the market price starts out too high or too low?
Wiki User
∙ 12y ago
If the prive is too high there will be less business for the person selling. If the price is too low you won't be making much profit.
Wiki User
∙ 12y ago
Add your answer:
Earn +20 pts
What happens to prices when there is a shortage in the market?
The price goes up if the demand is high
What happens to the market when a price ceiling is imposed?
If the price ceiling is above equilibrium: no effect. If the price ceiling is below equilibrium: price lowers to the ceiling level and supply falls. There is too much demand for the current level of supply. A black market forms to capture unmet demand at high prices.
What happens when supply is high and demand is high?
Then price stagnates.
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.
Explain why the price in competitive markets down at the equilibrium intersection of supply and demand explain what happens if the market price starts out too high or too low?
The effects of supply and demandAccording to the law of demand, as the price for an item goes up, the quantity demanded by people goes down, and as the price goes down, the quantity demanded goes up. On the other hand, from the producers point of view (the law of supply), if he's making more profit, he'll want to make more, and if he's making less profit he'll want to produce less of it.So as the price and profit goes up, the quantity supplied goes up also.Therefore the best amount to charge is the equilibrium price; where the consumer will be happy to buy it and the producer will be happy to sell it.That is why the price in competitive markets settles down at the equilibrium intersection of supply and demand.If the market price starts out too high, there will be little demand since it will be so expensive, and if the market price starts out too low, there will be little supply, because the producers are not gaining much profit from it.
What happens to prices when there is a shortage in the market?
The price goes up if the demand is high
What happens to the market when a price ceiling is imposed?
If the price ceiling is above equilibrium: no effect. If the price ceiling is below equilibrium: price lowers to the ceiling level and supply falls. There is too much demand for the current level of supply. A black market forms to capture unmet demand at high prices.
What happens when supply is high and demand is high?
Then price stagnates.
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.
Explain why the price in competitive markets down at the equilibrium intersection of supply and demand explain what happens if the market price starts out too high or too low?
The effects of supply and demandAccording to the law of demand, as the price for an item goes up, the quantity demanded by people goes down, and as the price goes down, the quantity demanded goes up. On the other hand, from the producers point of view (the law of supply), if he's making more profit, he'll want to make more, and if he's making less profit he'll want to produce less of it.So as the price and profit goes up, the quantity supplied goes up also.Therefore the best amount to charge is the equilibrium price; where the consumer will be happy to buy it and the producer will be happy to sell it.That is why the price in competitive markets settles down at the equilibrium intersection of supply and demand.If the market price starts out too high, there will be little demand since it will be so expensive, and if the market price starts out too low, there will be little supply, because the producers are not gaining much profit from it.
What sets prices in a perfect market?
market conditions are responsible for price setting, as thing in perfect market are homogeneous, any different product with special feature would have a high price for it .
What is the study of economics called?
in a market economy, a high price is a signal for?
What is a high MVP meaning?
MVP: Market Value Price of something...
What does Creaming the market mean?
Creaming the market is when a firm or business may charge a very high price for a certain product. The firm will continue to charge a very high price until rival products appear.
Too high to clear the market?
No producer can cover the costs of production at that price
Explain the difference between market price and normal price?
Price is the value or worth of a product or service and when you say price then it vehicle the normal price of a product or a service which a company charges. On the other hand, market price is the price of a product or service which is contained by a marketplace and is resulted through market efficiency, equilibrium and normal expectations. Normal price can be lesser, equal or greater than the market price. If most of the companies in an industry charge open market prices for the products or services then competition is high in that specific industry.
What are some of the factors that the market price of a product depends on?
if there is high demand for it but little of the product it will ofcourse go up in price and if there's low demand but a lot of the product the market price will go down dramatically
