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Shortages always raise prices and surpluses always reduce prices until competition produces a price where there are no more surpluses or shortages.
b. Shortages always raise prices and surpluses always reduce prices until competition produces a price where there are no more surpluses or shortages. ;D
occasional instability of employment and price levels.
competition affects price quality and quantity in grocery store
market economies use price mechanism to sove the prolems of economic choce .mixed economies also do the same facilitated by government interventions .
imperfect competition market
actually there are 6 main features of market economies : * private property * freedom of choice and enterprise * self interest as the dominating motive * competition * a reliance on the price system * a very little role for government ( negligible role for government )
Perfect Competition
Oligopoly
Free market economy is a free market system in which decisions regarding resource allocation,production, and consumption, and price levels and competition, are made by the collective actions of individuals or organizations seeking their own advantage.In all market economies, however, freedom of the markets is limited and governments intervene occasionally to encourage or dampen demand or to promote competition to thwart the emergence of monopolies. Also called free economy, free market, or free market economy.
Competition eliminates shortages and surpluses by setting a market- clearing price.
The free market provides people with the goods they want at the price they are willing to pay. -or- Free-market economies result in a very unequal distribution of wealth.