Explain how the price system eliminates a surplus
What will be an ideal response?
A surplus means that quantity demanded is less than quantity supplied. This will lead to downward pressure on price. As price falls, quantity demanded rises and quantity supplied falls. This will continue until quantity demanded is equal to quantity supplied.
Economics
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Which of the following equals the ratio of the change in total revenues over the change in output?
A) total cost B) average revenue C) demand D) marginal revenue
Economics
Suppose there is no change in total revenue when the price changes. The demand curve for this good is:
A. perfectly elastic. B. perfectly inelastic. C. elastic. D. unitary elastic.
Economics