Explain how the price system eliminates a surplus, Microeconomics

Assignment Help:

Explain how the price system eliminates a surplus.

The meaning of surplus is that quantity demanded is less as compared to the quantity supplied.  This will lead to downward pressure on price. Since price falls, quantity demanded rises and quantity supplied falls.  This will carry on until quantity demanded is equal to quantity supplied.


Related Discussions:- Explain how the price system eliminates a surplus

Explain supply and demand diagrams, During the 1990s, technological advance...

During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use of supply and demand diagrams, how the following markets are affected in terms of

Firms in a competitive markets, illustrate a long-run equilbrium using diag...

illustrate a long-run equilbrium using diagrams for the gold market and for a representative gold mine

Shifts in supply and demand, Shifts in Supply and Demand When supply an...

Shifts in Supply and Demand When supply and demand vary at the same time, the impact on the equilibrium price and quantity is known by: 1. The shape of the supply and dema

Revise business plans to incorporate appropriate cha, Revise business plans...

Revise business plans to incorporate appropriate changes.

Second best, what is the theory of second best ? prove the theorem with the...

what is the theory of second best ? prove the theorem with the help of a diagram ?

Find the equilibrium price and quantity, 1. Assume that the market for whea...

1. Assume that the market for wheat is perfectly competitive. Suppose the demand curve for wheat is given by: QD = 200 – 2P where QD is the quantity demanded, in bushels, and P i

Determine the economic order quantity, Question: Describe the meaning o...

Question: Describe the meaning of ABC inventory control and on what key premise is this system based? The finance department of Electric Corporation gathered the following i

The market supply of labour, graphical illustration describing the influenc...

graphical illustration describing the influence of an increase in immigrants on the market supply of labour

Economics principle.., During the 1990s, technological advance reduced the ...

During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use supply and demand diagrams, how the following markets are affected in terms of pr

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd