Describe What Would Happen in a Market If the Current

question 200

Essay

Describe what would happen in a market if the current price were above the equilibrium price (assume no government interference).Using the same assumptions, describe what would happen if the current price were below the equilibrium price.Use a graph to explain your answer.

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Definitions:

Households

Units consisting of one or more people living in the same dwelling and sharing meals or living accommodation; they can also be considered as basic units in society for consumption, production, and decision-making.

Firms

Business organizations, such as corporations or partnerships, engaged in commercial, industrial, or professional activities.

Markets for Goods

Platforms or mediums where goods and services are exchanged between buyers and sellers.

Households

Economic units consisting of all the people who occupy a housing unit, often playing a role as consumers in the economy.