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Supply and demand are fundamental concepts that drive economic decisions by influencing prices in the market. When demand for a product increases and supply remains constant, prices tend to rise, prompting producers to increase output or new competitors to enter the market. Conversely, if supply exceeds demand, prices may fall, leading to reduced production and potential business closures. These price fluctuations guide consumers' purchasing choices and businesses' investment strategies, ultimately shaping the overall economy.
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If supply exceeds demand for a product what economic explanation occurs?
prices decrease
What economic term means the willingness of consumers to purchase a specific amount of a product at different prices?
Demand is the economic term meaning the willingness of consumers to purchase a specific amount of a product at different prices.
What is the difference between the price effect and a change in demand?
The price effect refers to the change in the quantity demanded of a good or service due to a change in its price, typically illustrated by movements along the demand curve. In contrast, a change in demand indicates a shift of the entire demand curve, caused by factors such as consumer preferences, income levels, or the prices of related goods. While the price effect is concerned solely with price changes, a change in demand encompasses broader economic influences.
How does a mixed economic system affect demand and supply decisions by households and firms?
In a mixed economic system, both government and private entities play a role in making economic decisions, which influences demand and supply dynamics. Households and firms respond to market signals while also considering government interventions like taxes, subsidies, and regulations. This interplay can lead to altered prices and availability of goods, as the government may step in to correct market failures or promote social welfare. Consequently, households and firms must navigate both market conditions and regulatory frameworks when making demand and supply decisions.
Which of the terms describes an economy in which prices form the basis for economic decisions?
market or market economy
If supply exceeds demand for a product what economic explanation occurs?
prices decrease
What economic term means the willingness of consumers to purchase a specific amount of a product at different prices?
Demand is the economic term meaning the willingness of consumers to purchase a specific amount of a product at different prices.
What is the difference between the price effect and a change in demand?
The price effect refers to the change in the quantity demanded of a good or service due to a change in its price, typically illustrated by movements along the demand curve. In contrast, a change in demand indicates a shift of the entire demand curve, caused by factors such as consumer preferences, income levels, or the prices of related goods. While the price effect is concerned solely with price changes, a change in demand encompasses broader economic influences.
How does a mixed economic system affect demand and supply decisions by households and firms?
In a mixed economic system, both government and private entities play a role in making economic decisions, which influences demand and supply dynamics. Households and firms respond to market signals while also considering government interventions like taxes, subsidies, and regulations. This interplay can lead to altered prices and availability of goods, as the government may step in to correct market failures or promote social welfare. Consequently, households and firms must navigate both market conditions and regulatory frameworks when making demand and supply decisions.
Which of the terms describes an economy in which prices form the basis for economic decisions?
market or market economy
Are Economic systems based on supply and demand?
Yes, economic systems are fundamentally based on supply and demand, which determine the prices of goods and services in a market. Supply refers to the quantity of a product that producers are willing to sell at various prices, while demand indicates how much of a product consumers are willing and able to purchase. When supply exceeds demand, prices typically fall, and when demand exceeds supply, prices usually rise. This interaction helps allocate resources efficiently within an economy.
If the prices have a little effect on the quantity of a product demanded the product is said to have?
inelastic demand
How is A market economy is regulated by the interactions between which two things?
A market economy is regulated by the interactions between supply and demand. Supply refers to the quantity of goods and services that producers are willing to sell at various prices, while demand represents the quantity that consumers are willing to purchase at those prices. The equilibrium between supply and demand determines prices and resource allocation, guiding economic decisions and behaviors. This dynamic interaction helps to balance production and consumption in the economy.
When prices rise due to increased demand or decreased supply this shows?
When prices rise due to increased demand or decreased supply, it indicates a market imbalance where demand exceeds supply or supply is constrained. This situation often leads to higher prices as consumers compete for limited goods or services. It can signal economic growth or scarcity, prompting producers to increase output or new entrants to the market. Ultimately, such price changes can influence consumer behavior and production decisions.
In which system are economic decisions made based upon price?
Economic decisions based on price are typically made in a market economy. In this system, prices are determined by supply and demand dynamics, allowing consumers and producers to make choices that reflect their preferences and resource availability. This price mechanism helps allocate resources efficiently, guiding the production and consumption of goods and services.
What is the effect of economic meltdown in Nigeria?
Prices of goods increased from the normal state.
Mention two factors which effect food grains?
Two factors that affect food grains are weather conditions, such as rainfall and temperature, which can impact crop growth and yield, and market demand, which can influence prices and production decisions by farmers.
