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Who determines prices and goods that are made in a market economy?
Wiki User
∙ 10y ago
The 'Market' determines the Prices and which Goods are made. The 'Market' consists of the customers for the goods, and the sellers and manufacturers. Basically everyone involved.
The Customers create the DEMAND for items. For instance, they want small cars in a given price range. If there are only large cars at too high a price, they do NOT buy. Then manufacturers have to produce small cars at a price that will be acceptable to the 'Market', if they wish to stay in business.
Similarly, if the cars are offered for sale by the retailer at too high a price, they sit unsold on the lot, UNTIL the dealer lowers the price.
HOWEVER, if the cars go flying off the lot in a buying frenzy, the dealer will raise the price due to the increase in DEMAND. So price can fluctuate with demand. In an ideal Market, the supply equals the demand.
Wiki User
∙ 10y ago
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What determines the prices of goods and services in the product market?
Supply and demand. Supply and demand determines the prices of goods and services in the market.
Is England an planned economy?
No, the UK is a Market economy. A market economy is one in which in which the prices of goods and services are determined by supply and demand.
What are the components of a free market economy?
A free market economy is a market based one. The prices of goods and services are determined independently in a free market.
Who determines what goods to produce in the economy?
It is the demand and supply which determines the goods and services to produce in the economy.
How does the market economy function?
Market economy functions under the price mechanism. Prices of goods and serviced are determined by the interaction of demand and supply forces.
What determines the prices of goods and services in the product market?
Supply and demand. Supply and demand determines the prices of goods and services in the market.
Who determines what goods are produced in a market economy?
The Market(consumers... through their decisions) does it.
Is England an planned economy?
No, the UK is a Market economy. A market economy is one in which in which the prices of goods and services are determined by supply and demand.
What are the components of a free market economy?
A free market economy is a market based one. The prices of goods and services are determined independently in a free market.
Who determines what goods to produce in the economy?
It is the demand and supply which determines the goods and services to produce in the economy.
What is the difference between a free market and communist economy?
In a capitalist economy, production is determined by free market forces such as supply and demand. In a communist economy, the government determines which goods and services get produced and how much is available at any given time. Hope it helps!
How does the market economy function?
Market economy functions under the price mechanism. Prices of goods and serviced are determined by the interaction of demand and supply forces.
Which of the following is another term for a market economy?
A market economy, also widely known as a "free market economy," is one in which goods are bought and sold and prices are determined by the free market, with a minimum of external government control.
What type of economic market does not need to advertise?
A market where there is no choice, maybe, like a command economy, where goods and prices are set by the government.
In a mixed-market economic system who determines what products should be produced and how they should be produced?
In a command economy, also known as a planned economy, the government largely determines what is produced and in what amounts. In a mixed economy both market forces and government decisions determine which goods and services are produced and how they are distributed.
For whom are goods services produce in a market economy?
In a market economy, goods and services are produced for consumers.
How does command economy and market economy differ?
Central Planning: A centrally planned economy relies on a party in power to decide what resources should be allocated to various demands as they see fit.Free Market: A free market economy relies on prices to determine where demand should be filled and to what extent.Because of these differences, an economy that is centrally planned is usually inefficient in their allocation of resources to each market. They decide beforehand which areas will get resources, restricting the supply and setting a price with no knowledge about the consumer's choice.A free market is much more adaptable, using price as a communicator, supply, demand and price interact to form equilibriums that satisfy market clearing outcomes. This system is much more efficient in that the people who value the goods most are able to get them. This is the idea, it doesn't always work perfectly.
