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

Welfare, what is Scitovsky Contour ?

what is Scitovsky Contour ?

Discount rate, Discount Rate The term discount rate relates to ...

Discount Rate The term discount rate relates to business valuations. It is the rate applied to a future torrent of making an income or cash flow to measure its represen

Demography, This involves the characteristics of the production human as we...

This involves the characteristics of the production human as well as non human using the product concerned. For example it may pertain to the number and characteristics of children

Technological change, Is it possible for a firm to experience a technologic...

Is it possible for a firm to experience a technological change that would increase the marginal product of labor while leaving the average product of labor unchanged?

Elasticity, discuss how cross of demand is useful in categorizing commoditi...

discuss how cross of demand is useful in categorizing commodities

Production function for wheat, Production Function for Wheat *  Farmers...

Production Function for Wheat *  Farmers should choose between a capital intensive or labor intensive technique of production. Isoquant Describing Production of Wheat

Economic applications project, Within analysis of perfect competition, we d...

Within analysis of perfect competition, we distinguish between the short run and the long run on the basis that use of some input factors is fixed in the short run, but variable in

OLIGOPOLY, EXPLAIN KINKED DEMAND CURVE

EXPLAIN KINKED DEMAND CURVE

Change in consumer surplus, a. Generally, there will be a difference betwe...

a. Generally, there will be a difference between the CV and the EV. Why? b. The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it

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