« previous next »

Author Question: Explain how the price system eliminates a shortage. What will be an ideal ... (Read 69 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?

If you could remove all of your skin, it would weigh up to 5 pounds.

Did you know?

Methicillin-resistant Staphylococcus aureus or MRSA was discovered in 1961 in the United Kingdom. It if often referred to as a superbug. MRSA infections cause more deaths in the United States every year than AIDS.

Methicilli ...
Did you know?

Most childhood vaccines are 90–99% effective in preventing disease. Side effects are rarely serious.

Did you know?

The use of salicylates dates back 2,500 years to Hippocrates’s recommendation of willow bark (from which a salicylate is derived) as an aid to the pains of childbirth. However, overdosage of salicylates can harm body fluids, electrolytes, the CNS, the GI tract, the ears, the lungs, the blood, the liver, and the kidneys and cause coma or death.

Did you know?

After 5 years of being diagnosed with rheumatoid arthritis, one every three patients will no longer be able to work.

Structures of the respiratory system. Structures of the respiratory system.
The level in the coolant recovery system raises and lowers with engine temperature. The level in the coolant recovery system raises and lowers with engine temperature.
Clip-on adapters are used with an ignition system that uses an integral ignition coil. Clip-on adapters are used with an ignition system that uses an integral ignition coil.
The respiratory system. The respiratory system.
The Koeppen System The Koeppen System
Video: Glycolysis - Introduction to ATP and the burning of sugar

For a complete list of videos, visit our video library