An equilibrium price in the market is considered as the market clearing price because at this price the demand and the supply are equal. If the price is above the equilibrium price there is excess supply in the market that will increase the inventory in the market and below the equilibrium price there is a shortage in the market.
Its only at the equilibrium price there is no shortage or excess supply in the market. That is why is called the market clearing price.
Explain why the equilibrium price is called the market clearing price. Please provide the reason and...
Help clearing price. 7 Explain the effect on market price and quantity in the market for mobile phones of each of the following: consumer incomes rise; technical improvements reduce production costs; the price of fixed-line calls falls sharply. 8 Suppose that the world price of cocoa rose by 20%
(a) Why is the interbank lending market often called market for reserves? Explain, with the help of a supply/demand diagram, how the equilibrium interbank rate is determined. How are the Central bank's lending rate and the rate paid on banks reserves reflected in your diagram? (30 Marks) b) The Central bank wishes to lower market interest rates- will it buy or sell bonds in the open market to meet this target? Use the relevant market equilibrium framework in your answer....
suppose that after a change in determining factors, the market-clearing price falls as the equilibrium quantity rises. which of the following could have occurred? a)there was an increase in the price of a complement b)there was a reduction in the number of firms that produce the good c)there was an increase in the number of consumers d)there was a decrease in the input price of the good
Which of the following is not a reason why market equilibrium is significant? Select one: a. Because deviations from equilibrium send signals to buyers and sellers to change their plans, b. Because it perfectly coordinates the plans of buyers and sellers. c. Because it is the price where quantity demanded equals quantity supplied. d. Because it determines the inherent usefulness and value of the products we buy. e. none of the above (all of the above are reasons why mkt...
Question 11 of 27 A market clearing condition occurs when price floors are set at or below the equilibrium price Select above the equilibrium price at or below the equilibrium price at a price that yields a surplus Question 12 of 27
Explain how a free working market will bring the economy to equilibrium. Why is equilibrium important? When constructing supply and demand curves we assume that all factors affecting supply and demand remain constant except price. Explain what happens to equilibrium when price changes. Explain what happens to equilibrium when any of the factors, other than price, change. 1. Draw the supply and demand curves for frozen yogurt. Show equilibrium 2. Show and explain what will be the first thing that...
Provide a brief statement to explain why the following equilibrium favors the enol tautomer. Please further explain the corrected answer written in red. 12) Provide a brief statement to explain why the following equilibrium favors the enol tautomer. OH ccouse it has mere Stap:Aky dve れ) (esonance romatic Slabi hat 12) Provide a brief statement to explain why the following equilibrium favors the enol tautomer. OH ccouse it has mere Stap:Aky dve れ) (esonance romatic Slabi hat
Describe how the insurance market works. Explain why this market may have no equilibrium? PLEASE USE THIS LINK TO GET THE ANSWER !!! file:///C:/Users/Auditor8/Downloads/Rothschild&Stiglitz.pdf.pdf
The consumer's gain from the imposition of a price ceiling is higher when (Please provide answer with detail reason and explanation) A) the own price elasticity of market demand is high and the price elasticity of market supply is high. B) the own price elasticity of market demand is high and the price elasticity of market supply is low. C) the own price elasticity of market demand is low and the price elasticity of market supply is high. D) the...
Explain how a free working market will bring the economy to equilibrium. Why is equilibrium important? When constructing supply and demand curves we assume that all factors affecting supply and demand remain constant except price. Explain what happens to equilibrium when price changes. Explain what happens to equilibrium when any of the factors, other than price, change.