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Why market prices are better than government determined prices?
Wiki User
∙ 12y ago
Market prices tend to an equilibrium where buyers' demand for the good is worth less than the sellers' cost of supplying the good. Put another way, buyers are willing to pay less than the amount producers are willing to accept. Government sets its prices above or below this point. If the price is above the equilibrium buyers will demand less than producers supply. On the other hand, if price is below the equilibrium sellers will supply less than buyers demand.
Wiki User
∙ 12y ago
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How is price determined under imperfect market?
Remember under this market there's a government intervention.the Government determine the prices of the market by using the minimum(the minimum that the market can charge) and maximum wage(Maximum that the market can charge)
What does mixed capitalism means?
A market system where there is a mix between free market (without regulation and laws, prices are determined by the market forces) and controlled market( with government restrictions).
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.
In a market economy income is primarily determined by?
the quantities and prices of the resources that households supply.
How does a price ceiling undermine the rationing function of market-determined prices?
A price ceiling will undermine the rationing function of market-determined prices by creating a shortage. This is a price which is below equilibrium which will lead to more demand that supply that will cause a shortage.
How is price determined under imperfect market?
Remember under this market there's a government intervention.the Government determine the prices of the market by using the minimum(the minimum that the market can charge) and maximum wage(Maximum that the market can charge)
What does mixed capitalism means?
A market system where there is a mix between free market (without regulation and laws, prices are determined by the market forces) and controlled market( with government restrictions).
How did the collectives in the soviet union avoid the competition that drives a free market?
The government determined prices, wages, and products.
How did collectives in the soviet union avoid the compitition that drives a free market?
The government determined prices, wages, and products.
How gold price determined in India?
gold prices are determined on the basis of stock market.
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.
How are prices formed without government involvement in the market?
In a normally operating free market, prices are determined by mutual voluntary agreement of willing buyers and willing sellers. However, this is an ideal situation that often gets distorted in the real world.
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.
In a market economy income is primarily determined by?
the quantities and prices of the resources that households supply.
What is the definition of free market economyor capitalism?
A free market economy is where prices are determined by supply and demand. Prices are not set by the government or other agency. Capitalism is where the person can decide what job to do, and who to work for. A person may also decide to open their own business. The typical opposite of capitalism is communism where the government decides all these things for the people.
How does a price ceiling undermine the rationing function of market-determined prices?
A price ceiling will undermine the rationing function of market-determined prices by creating a shortage. This is a price which is below equilibrium which will lead to more demand that supply that will cause a shortage.
How are prices established in the foreign-exchange market?
As in all other market, prices of the currencies pairs are determined by the supply and demand of the market. When the demand is higher than the supply the price increases and vice versa.
