+ves and -ves of market systems
- Created by: Itwasntme193
- Created on: 15-10-20 15:47
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Market systems
What is a market?
- A market is where buyers and sellers meet to trade or exchange products.
- The 'clearing price', 'market price' and 'equilibrium price' are all the same thing.
- When the suppliers cost is equal to the consumer's benefit, then a sale will be agreed.
- This clears the market.
- There is a lot of price fluctuation in competitive markets to acheive this market price.
The role of price
- the price mechanism transmits info about 'values' between b&s, such as the cost of prod.
- Price has 3 roles: Signalling, rationing and incentivising.
Allocation
Rationing
Signalling
Incentivising
Advantages of free market systems:
- Consumers…
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