BU204: Macroeconomics

Economics
Tutor: None Selected Time limit: 1 Day

Why supply and demand is considered as factors that make market economies work? 

Jun 27th, 2015

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The interaction between market demand and supply determines the equilibrium or market price (where demand equals supply). Shifts in the demand curve and/or the supply curve lead to changes in the equilibrium price. The market price and the price mechanism play crucial roles in the capitalist system—they send signals to both producers and consumers. The price mechanism is an integral part of the study of market structures that constitute the bulk of microeconomic theory.

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Jun 27th, 2015

Thank you for the response.  What references did you use?


Jun 27th, 2015

Blanchard, Olivier. Macroeconomics. Prentice Hall, 1997.

Froyen, Richard T. Macroeconomics: Theories and Policies. 6th ed.

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Jun 27th, 2015

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