« previous next »

Author Question: Explain how the price system eliminates a shortage. What will be an ideal ... (Read 63 times)

abarnes

  • Hero Member
  • *****
  • Posts: 556
on: Jun 29, 2018
Explain how the price system eliminates a shortage.
 
  What will be an ideal response?

Question 2

What are some of the problems that exist with a laissez-faire economy?
 
  What will be an ideal response?


joanwhite

  • Sr. Member
  • ****
  • Posts: 308
Reply #1 on: Jun 29, 2018
Answer to Question 1

A shortage means that quantity demanded is greater than quantity supplied. This will lead to upward pressure on price. As price rises, quantity demanded falls and quantity supplied rises. This will continue until quantity demanded is equal to quantity supplied.

Answer to Question 2

Free markets may not always produce the goods and services that people want at the lowest cost. They are not always efficient. Also, income may be distributed unequally.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The first oral chemotherapy drug for colon cancer was approved by FDA in 2001.

Did you know?

More than 2,500 barbiturates have been synthesized. At the height of their popularity, about 50 were marketed for human use.

Did you know?

Common abbreviations that cause medication errors include U (unit), mg (milligram), QD (every day), SC (subcutaneous), TIW (three times per week), D/C (discharge or discontinue), HS (at bedtime or "hours of sleep"), cc (cubic centimeters), and AU (each ear).

Did you know?

Nearly all drugs pass into human breast milk. How often a drug is taken influences the amount of drug that will pass into the milk. Medications taken 30 to 60 minutes before breastfeeding are likely to be at peak blood levels when the baby is nursing.

Did you know?

Nitroglycerin is used to alleviate various heart-related conditions, and it is also the chief component of dynamite (but mixed in a solid clay base to stabilize it).

The respiratory system is assessed for ventilatory changes. The respiratory system is assessed for ventilatory changes.
Schematic of the Earth–Moon system (without a consistent scale) Schematic of the Earth–Moon system (without a consistent scale)
Disorders of the Female Reproductive System Cont. Disorders of the Female Reproductive System Cont.
The fuel system should hold pressure if the system is leak free. The fuel system should hold pressure if the system is leak free.
Basic structure of the autonomic nervous system. Basic structure of the autonomic nervous system.
Video: Regulation of GFR: three methods, autoregulation & autoregulation via myogenic mechanism

For a complete list of videos, visit our video library