0
When there is a shortage, producers raise prices in an attempt to balance supply and demand. Higher prices can discourage some consumers from purchasing the product, thereby reducing demand and allowing more of the product to be available for those who value it most. Additionally, increased prices can incentivize producers to increase production or attract new entrants into the market, ultimately helping to alleviate the shortage.
What else can I help you with?
According to the demand-pull theory of inflation what is responsible for inflation?
producers raise prices to meet increased costs
What is a cartel?
a group of producers working together to raise prices and profits
Which of these groups of producers working together to raise prices and increase profits?
A Cartel
How did some farmers try to raise crop prices?
Some farmers began destroying their crops in a desperate attempt to raise crop prices by reducing the supply.
What signal does a rise in prices send to producers?
in class room economic: make more in real world economics: flood the market and raise prices
According to the demand-pull theory of inflation what is responsible for inflation?
producers raise prices to meet increased costs
What is a cartel?
a group of producers working together to raise prices and profits
Which of these is a group of producers working together to raise prices and increase profits?
cartel
Which of these groups of producers working together to raise prices and increase profits?
A Cartel
How did some farmers try to raise crop prices?
Some farmers began destroying their crops in a desperate attempt to raise crop prices by reducing the supply.
What signal does a rise in prices send to producers?
in class room economic: make more in real world economics: flood the market and raise prices
What is considered one cause inflation?
Producers raise prices to meet increased costs, which causes costs to consumers to rise.
What is considered one cause of inflation?
Producers raise prices to meet increased costs, which causes costs to consumers to rise.
What are the reasons for variations in the amount of minerals extracted every year?
The principle reason is demand if it goes up then more minerals are extracted if it goes down then less is mined. If the price falls too low some producers may stop mining purposely to raise prices by creating a shortage.
Differences demand-pull inflation and cost-push inflation?
Demand-pull inflation: prices rise due to shortage; firms produce more and raise price to meet demand. Cost-push inflation: prices rise due to increasing costs of production; firms raise price in order to not produce less.
Do film directors or music producers raise money for a film?
film producers
Adam Smith points out the possibility of producers contriving to raise prices Are there other problems with the free-market system that he didnt point out?
Yes, while Adam Smith acknowledged the potential for producers to collude to raise prices, other issues in the free-market system include market monopolies, externalities, and information asymmetry. Monopolies can stifle competition and lead to higher prices and reduced innovation. Externalities, such as pollution, can result in social costs not reflected in market prices. Additionally, information asymmetry can lead to imbalances where consumers or smaller businesses are at a disadvantage, undermining the efficiency of the market.
