Question

Why do markets will move to equilibrium? What does this mean for resources (factors of production)?

Why do markets will move to equilibrium? What does this mean for resources (factors of production)?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Market equilibrium is the market state where supply in market is equal to demand in market.If market is not at equilibrium then markets tends to move to equilibrium.If the market is in equilibrium price wont change unless an external factor changes the supply or demand, resulting in disruption of equilibrium.If price is below equilibrium there is excess demand .So buyers bid up price inorder to obtain goods and services in shorter supply.Additionally sellers more happy to see demand , will start to supply more of it. As a result pressure on price and supply will stabilise at market equilibrium.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Why do competitive markets achieve equilibrium?
Why do competitive markets achieve equilibrium?
What does it mean for 2 objects to be in thermal equilibrium and why is temperature...
What does it mean for 2 objects to be in thermal equilibrium and why is temperature not the only factor used in the "method of mixtures" to determine where that equilibrium falls?
3. Why do you think economists really like to talk about competitive markets? 4. What does...
3. Why do you think economists really like to talk about competitive markets? 4. What does the concept of low or no barriers to entry mean? Why is it so important to understand barriers to entry? 5. Give me 5 examples of price takers in perfectly competitive markets.
True or False and why? All markets eventually come to equilibrium. Will they come to equilibrium...
True or False and why? All markets eventually come to equilibrium. Will they come to equilibrium at the same time for all markets - like for bread, cars, baseball games, and vegetables?
1. What is a competitive market? Briefly describe the types of markets other than perfectly competitive...
1. What is a competitive market? Briefly describe the types of markets other than perfectly competitive markets. 2. What is the demand curve? Why does it slope downward? 3. Define the equilibrium of a market. Describe the forces that move a market toward its equilibrium. 4. Describe the role of prices in market economies.
Define the market equilibrium What are the factors of production? What is the demand law? What...
Define the market equilibrium What are the factors of production? What is the demand law? What is the supply law? What are the determinants of demand? And how they affect the demand curve? What are the determinants of supply? And how they affect the supply curve? What are the types of goods according to income, with definition? What are the types of goods according to the price of other goods, with definition?
When negative externalities exist, how do free markets misallocate resources?
When negative externalities exist, how do free markets misallocate resources?
According to a well-known economist Oliver Williamson, there are environmental factors ( i.e. uncertainty and number...
According to a well-known economist Oliver Williamson, there are environmental factors ( i.e. uncertainty and number of firms) and human factors (i.e. bounded rationality and opportunism) that affect transaction costs across markets and firms. Explain why firms may produce their own resources internally and not rely on the markets when there are great uncertainty. Explain why when the number of firms supplying factors of production is small, firms do not want to engage in long term contracts with these suppliers.
Why do bodies of water act as a heat bank? How does carbon move through the...
Why do bodies of water act as a heat bank? How does carbon move through the carbon cycle? What is the interplay between photosynthesis and global warming?
Why is it an advantage to move the production of sesquiterpenoids to the plastids?
Why is it an advantage to move the production of sesquiterpenoids to the plastids?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT