0
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 else can I help you with?
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illustrate and explain e the consumer equilibrium ender cardinalist and ordinalist?
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