0
When the sellers and buyers agree on a price, and the price is stable, in the short run.
Wiki User
∙ 14y ago
Add your answer:
Earn +20 pts
What happens when the market price is lower than the equilibrium price?
When the market price is lower than the equilibrium price the price of the product will continue to rise. The price will rise until it equal the equilibrium price.
What Keynesians believe?
Keynesians generally believe that wages and prices are 'sticky', a word which here means 'slow to adjust to changes in the market'. In the short-run, Keynesians argue that the market fails to correct itself after disturbances due to stickiness and that direct government intervention - by promoting aggregate demand - can restore equilibrium and thus eliminate welfare loss due to disequilibrium.
Why do prices move towards equilibrium in a free market?
Because if a business is profitable, competitors will spring up, thus clustering prices towards the equilibrium. Conversely, if it is not profitable, then prices will move toward the point at which it is, or the business will exit the market.
In a perfectly competitive market do firms exhibit productive efficiency?
in the short-run they are not able to but in the longrun it can be attainerd as businesses want to lower their average costs!
What is market fluctuation?
Market fluctuation is the rise or fall in price of a security or the market in a short-period of time.
What is equilibrium GDP?
In the short run, equilibrium GDP is the level of output at which output and aggregate expenditure are equal
What is Market equilibrium?
Market equilibrium is this situation when market demand is equal of market supply
What is the self-correcting mechanism of the currency exchange market?
The automatic process in which the aggregate market eliminates a recessionary gap created by a short-run equilibrium that is less than full employment through decreases in wages (and other resource prices). The self-correction mechanism is triggered by short-run resource market imbalances that are closed by long-run price flexibility. The self-correction process of the aggregate market also acts to close an inflationary gap with higher wages (and other resource prices).
Why will market equilibrium be re-established once disturbed?
It was found experimentally that Market has to re-establish Equilibrium via Market mechanism. Such that Market equilibrium is a desired status in the market where both suppliers and Consumers will tend re-establish market equilibrium (through demand & Supply) undeliberately.
Equilibrium and economies scale in market economy?
Equilibrium and economies scale in market economy
Example of market equilibrium?
Market equilibrium is when the demand of the product and the supply of the product is equal. If either demand or supply changes, then the equilibrium adjusts.
What are the differences between a market in equilibrium and a market in disequilibrium?
equilibrium is the responsiveness of quantity demand to a change in price.
Explain how equilibrium in international market can be achieved and what factors can influencing its equilibrium?
== ==
When is a market in equilibrium?
In elementary economics equilibrium is the intersection between the supply and demand curves. When quantity supplied is said to equal quantity demanded the market has then reached equilibrium.
When a market operates so that there are no shortages and no surplusesthen the market is?
At equilibrium.
Assume the US economy is in short-run equilibrium with a price level of 150 and output of 6 billion The money m What is the impact of the Federal Reserve's policy on the equilibrium interest rate?
It Falls
Why market equilibrium is said to be highly unstable one?
cause in real life market never remains at equilibrium, many factors affect market price and quantity
