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demand refers to need for a resource. the law of demand states that an increase in demand will result in an increase in price, ceteris paribus. in a free market economy, sellers are free to increase prices when demand increases. in a closed economy prices are controlled by government. an increase or decrease in demand doesn't affect prices.
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Which terms would not apply to a free market economy?
supply and demand
Explain Why the law of demand can apply only in a free market economy?
The law of demand is that, all other factors held constant, the quantity of a good demanded increases as the price of that good falls. In a command economy, unlike a free market economy, it is the govenment, not market supply and demand,that determines prices.
What are the three aspects in free market economy?
The three aspects in free market economy are capitalism is a free market system of trade, governed exclusively on the economic principle of supply and demand. You need all of these to have a free market economy.
What is the role of competition in a free market economy?
To change the supply and demand
In a free market economy decisions are made according to what laws?
supply and demand
Which terms would not apply to a free market economy?
supply and demand
Explain Why the law of demand can apply only in a free market economy?
The law of demand is that, all other factors held constant, the quantity of a good demanded increases as the price of that good falls. In a command economy, unlike a free market economy, it is the govenment, not market supply and demand,that determines prices.
How are good resources distributed in a free market economy?
In a free market economy, goods and resources are distributed by property and supply/demand.
What are the three aspects in free market economy?
The three aspects in free market economy are capitalism is a free market system of trade, governed exclusively on the economic principle of supply and demand. You need all of these to have a free market economy.
What is the role of competition in a free market economy?
To change the supply and demand
In a free market economy decisions are made according to what laws?
supply and demand
How can price be determined in a free market economy?
Price in a free market economy is determined by the interaction of supply and demand. When demand for a product exceeds supply, prices tend to rise. Conversely, when supply exceeds demand, prices tend to fall. This price mechanism helps allocate resources efficiently based on consumer preferences and production costs.
What set price in a free market economy?
The cost of production of an item & its demand set its price
What two forces regulate the free market economy?
Basically, the two forces are supply and demand.
What is the economic system based on the law of supply and demand during the cold war?
free market economy
Prices in a market economy are based on?
The prices in a market economy are based on supply and demand. In a free price system, these are based on several factors like citizen interactions and observations.
What is canadas economy based on?
A free market economy
