--%>
Assignment Help - homework help

Functions of price mechanism

What are the various functions of price mechanism in a free market economy?

E

Expert

Verified

Price mechanism is the point which equilibrates demand and supply within a market it is a mechanism of pricing the price mechanism is one which can allows the prices of goods and services to be decided by the interplay between demand and supply, there is no centralized price fixing.

The concept of price mechanism is that the free market when left to its own devices, will formulate fair prices of the goods or services on its own by the natural laws of supply and demand.

   Related Questions in Microeconomics

  • Q : Problem on Market clearing price The

    The Equilibrium in a market needs the attainment of a: (1) Balancing act passed by the Congress. (2) Supply price for each and every possible quantity. (3) Demand quantity for each and every possible price. (4) Market clearing price.

    Q : Definition of Economic Profit To assert

    To assert that a firm made exactly zero economic profits as well signifies that it made: (i) Zero accounting profits. (ii) Normal economic profits. (iii) Negative accounting profits. (iv) No profits at all. Choose the right answer

    		•
  • Q : Competition and Rivalry When new firms

    When new firms enter an imperfectly competitive market, in that case the demand curves of the firms previously in the market will: (w) shift to the left. (x) shift to the right. (y) become vertical. (z) become horizontal.

    Q : Labor Unions and Aggregate salary Income

    The least probable outcome when unions succeed in increasing their member’s salaries is that: (1) Wages in non-union sectors will drop. (2) Employment will produce in non-union sectors. (3) Barriers will be building up to limit the entry to unions. (4) Labor's s

    		•
  • Q : When is Price Ceiling not create

    Price ceilings do NOT create pressures for: (w) shortages of price controlled goods. (x) black markets, queuing, or sales by favoritism. (y) opportunity costs to be lower than or else. (z) transactions at monetary prices below the equilibrium price.

    		•
  • Q : Problem on Blacklisting The

    The Blacklisting was once common however now illegal in the labor market practice of: (i) Boycotting the products of firms whose workers are on strike. (ii) Forcing the workers to sign agreements not to join the unions. (iii) Paying the union officers to systematize u

    		•
  • Q : Supply of good in competitive economy

    When the supply of a good shrinks in a competitive economy, there tends to be a raise in the: (1) Product price. (2) Incomes of producers. (3) Demand for resources. (4) Quantity supplied. Can someone please help me

    		•
  • Q : Substitutes and compliments pizza and

    pizza and sausage substitute or compliment wheat and rye substitute or compliment

    		•
  • Q : Government banks function Government

    Government banks function: The central bank conducts the banking account of the government departments. This performs similar banking functions for the government as commercial bank executes for its customers. This accepts their deposits and undertake

    		•
  • Q : Managerial economics and good business

    please find the attached file (project) and qoute for it. minimus 7 pages required.

    		•