Question

1. Would prices come to equilibrium faster for bread or cars? Defend your choice and explain why.

2. How do prices change in the market? Who changes the prices?

Answer 1

The Price come to equilibrium faster for Bread rather than Cars.The Bread is necessary good if the supply of Bread in the market results increasing the price the suppliers can produce the Bread and supply to the market since the cost of the production is less and it involves less time produce bread.

Another hand increase in the demand for particular brand Cars the equilibrium price cannot be achieved easily because it involves the much time-consuming process.

2) The Demand and Supply change the price in the market example if demand for particular good is high in connection to supply then price increases, Likewise, if supply of goods is more in connection with demand price will fall in the market.