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

Traditional food processing methods, discuss african traditional methods of...

discuss african traditional methods of production and processing of food

Concept of efficiency, The Concept of Efficiency is stated below: To il...

The Concept of Efficiency is stated below: To illustrate this concept of the efficiency, it is used to expand the understanding of what is meant by the Pareto-efficient allocat

What is deplasmolysis of plant cells, The plant cell when placed under hype...

The plant cell when placed under hypertonic medium loses a great quantity of water and its cell membrane detaches from the cell wall. In that situation the cell is known as plasmol

Advocacy of globalisation, Advocacy of Globalisation: In support of th...

Advocacy of Globalisation: In support of the movement for globalisation, the following arguments are put forth: i) Globalisation promotes foreign direct investment and, thu

Black or underground or illegal economy, Black or underground or illegal ec...

Black or underground or illegal economy: Black or underground or illegal economy has to be conceptualised as an integral and growing part of a variety of economies which emerg

Draw demand curve, Suppose that the following equation characterizes the de...

Suppose that the following equation characterizes the demand for primary education in a developing country X: Q = 100 – 2P Where Q is quantity demanded in years of schooling and

Managerical economics, Plot the demand schedule and draw the demand curve f...

Plot the demand schedule and draw the demand curve for the data given for Marijuana in the case above?

Define the circular flow diagram, The circular flow diagram is used to repr...

The circular flow diagram is used to represent the interdependence that exists between sectors of the economy.  The diagram illustrates that there are various collections of same e

Explain strategic bidding problem, Two firms, A and B, are planning to ...

Two firms, A and B, are planning to bid for a contract of Motorway extension in Mauritius. Suppose: (1) firm B is a newly established company and has already incurred a st

Production possiblities curve, suppose either computers or televisions can ...

suppose either computers or televisions can be assembled with the following labor inputs: units produced: 1 2 3 4 5 6 7 8 9 10 total labor used: 3 7 12 18 25 33 42 54 70 90 Draw th

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