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The cost of production of an item & its demand set its price
Alberto Hoeger
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Does Ecuador have a command economy?
a good one, kinda raffael correa is the president
Which is not a feature of a market economy?
The price a consumer pays is set by the government. A+
How is equilibrium price set in a free market?
Equilibrium price: demand formula = supply formula So in a free market most entrepreneurs decide to set the price in such a way that supply is not higher than demand and vice versa.
When is price ceiling non-binding?
Binding Versus Non-Binding price ceilingsA price ceiling can be set above or below the free-market equilibrium price. For a price ceiling to be effective, it must differ from the free market price. In the graph at right, the supply and demand curves intersect to determine the free-market quantity and price. The dashed line represents a price ceiling set above the free-market price, called a non-binding price ceiling. In this case, the ceiling has no practical effect. The government has mandated a maximum price, but the market price is established well below that.In contrast, the solid green line is a price ceiling set below the free market price, called a binding price ceiling. In this case, the price ceiling has a measurable impact on the market.
What is the difference between a market economy and a command economy?
An economy may be defined as the state of a country or region in terms of the production and consumption of goods and services, and the supply of money. A market economy (also called a free market economy, free enterprise economy) is an economic system in which the production and distribution of goods and services takes place through the mechanism of free markets guided by a free price system . On the other hand, a command economy (also known as planned economy) is an economic system in which the state or government controls the factors of production and makes all decisions about their use and about the distribution of income
The Age of Exploration helped set the stage for the development of the free market economy in Western Europe and in America?
true
A free market economy in which prices are set by economic forces of supply and demand is sometimes described as?
Laissez-faire
Why has Slovakia had difficulty changing to a free market economy?
After the fall of the communism , Slovak leaders set out to privatize businesses
What is a set of assumptions that shows how a market works?
market economy.
Why is economic efficiency important to a free market economy?
Generally speaking, a company in a free market economy must set prices for its products that are "competitive" with other companies in the same line of business. If a company is inefficient in its operations, it won't be able to remain in the market of its competitors and may go bankrupt.
How does the invisible hand of competition set a market price in a market economy?
b. Shortages always raise prices and surpluses always reduce prices until competition produces a price where there are no more surpluses or shortages. ;D
What is the difference between administered prices and market prices?
administered price means price set by a body outside of the market..And market price is a price set up on basis of demand and supply.
