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How do prices serve as incentives in a market economy?
A market economy is one which is runned by market forces.In that,demand and supply are determined by consumers and not the central government or other associates.Whenever prices increase demand decreases and whenever price decreases demand increases.Suppliers decrease thier supply of a commodity whenever they increase prices and decrease thier prices whenever there is a surplus on the market.They do this to clear excess supply.Also,consumers tend to demand more of a product whenever there is an expexted price hike for a good and tend to demand less whenever they expect prices to decrease.make a person take an action
When and why do suppliers increase their production and raise prices?
so they get more money and you get less stuff
Why are fluctuations in the economy harmful?
Inflation can be harmful if individuals' incomes do not increase at the same rate as rising prices, because then the consumers buy less. Economic contraction is harmful because companies begin to lay off workers, and the economy slows down.
When consumers react to an increase in a goods price by consuming less of that good and more of another it is called the?
Substitution effect
Assuming that are other things remains unchanged how with suppliers react to a price increase for product?
The consumers would buy less of that product
When prices are consumers buy?
raised/less
What is customary pricing?
Prices of certain goods are more or less fixed in the minds of consumers; these are known as "Charm prices" . E.g. soft drinks.
How do prices serve as incentives in a market economy?
A market economy is one which is runned by market forces.In that,demand and supply are determined by consumers and not the central government or other associates.Whenever prices increase demand decreases and whenever price decreases demand increases.Suppliers decrease thier supply of a commodity whenever they increase prices and decrease thier prices whenever there is a surplus on the market.They do this to clear excess supply.Also,consumers tend to demand more of a product whenever there is an expexted price hike for a good and tend to demand less whenever they expect prices to decrease.make a person take an action
disadvantage of increase fuel price?
Increasing fuel prices can have several disadvantages, including: Increased cost of living: When fuel prices increase, it affects the cost of transportation, which can lead to an increase in the cost of goods and services. This can lead to a higher cost of living for consumers. Inflation: Fuel is used in many industries, including manufacturing and transportation, and an increase in fuel prices can lead to an increase in the cost of production. This can lead to inflation, which can have a negative impact on the economy. Reduced consumer spending: When fuel prices increase, consumers may have less disposable income, which can lead to reduced spending on other goods and services. This can have a negative impact on businesses that rely on consumer spending. Impact on low-income households: Higher fuel prices can have a disproportionate impact on low-income households, as they tend to spend a higher percentage of their income on fuel and transportation
How does the imposition of tax affect the prices paid by the buyer and the prices paid by the seller?
Taxes increase the price of goods or services. This means consumers can afford less of them. Prices are not paid by the seller. But it does mean the seller sells fewer items and therefore receives less income. He in turn orders less from the manufacturer. He may try to negotiate with the manufacturer a reduction in the wholesale price he pays so he can reduce his retail price and absorb the tax.
When and why do suppliers increase their production and raise prices?
so they get more money and you get less stuff
Why are fluctuations in the economy harmful?
Inflation can be harmful if individuals' incomes do not increase at the same rate as rising prices, because then the consumers buy less. Economic contraction is harmful because companies begin to lay off workers, and the economy slows down.
When consumers react to an increase in a goods price by consuming less of that good and more of another it is called the?
Substitution effect
The fuel prices are going down internationally But the benefit is not being shared by the consumers Why?
Many would argue that the benefits ARE being shared by consumers. Lower gas prices mean that less of a consumer's income goes towards a need such as energy. Most consumers would agree that they would rather pay the current price for gas than the record prices from a few months ago.
Why did chain stores sell goods at lower prices?
Chain stores are able to purchase goods in large volumes for reduced prices from manufacturers, and can then sell the goods to consumers for less money.
What happens when there is a surplus of imports brought into the US?
Domestic producers competing with imports suffer from lower prices and fewer sales. They have less revenue and resource owners doing the production have less income. However, Domestic consumers enjoy lower prices!
Assuming that are other things remains unchanged how with suppliers react to a price increase for product?
The consumers would buy less of that product
