What is the mechanism for establishing the equilibrium price?
| April 15, 2021 | education
The mechanism for establishing an equilibrium market price is the interaction of such market elements as: supply, demand, competition and basic economic laws. There are two types of mechanisms: excess and scarcity. Surplus is when the amount of supply of a product at the existing price will exceed the amount of demand for it. Shortage is when the quantity demanded exceeds the quantity of the expected product.
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