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Analyze why prices must be flexible in our economy. Explain why a shortage might be present at a store and how would a manager be able to solve this problem.

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Chika Ilonah
Chika IlonahLv10
28 Sep 2019

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Related questions

Explain in detail why it is important that prices are flexible in our economy? What are the implications if the government started to control prices for products, how would this influence buying?

(Market Equilibrium). Aggregate market supply and demand for good Y are the following:

Qd (P)=10,368/P

Qs (P)=24P+576

 

Hint 1:  Solve for a quadratic in P (i.e.,   You will then need to either factor the quadratic or use the quadratic formula to solve this problem x=(-b±√(b^2-4ac))/2a

Hint 2:  You will get two possible equilibrium prices.  You want a positive price since prices must be positive.

 

1. Calculate the equilibrium price and quantity.

 

2.  Does the market demand function follow the law of demand at the equilibrium price? EXPLAIN

 

3.  Does the market supply function follow the law of supply at the equilibrium price? EXPLAIN

 

4. Is there a surplus or shortage at the equilibrium price? EXPLAIN

 

5. Calculate the surplus or shortage when the price is $8

1- Why do you think macroeconomists focus on just a few key statistics when trying to understand the health trajectory of an economy? Would it be better to try to examine all possible data? Explain.

2- Why, in general, do shocks force people to make changes? Give a least two examples from your own experiences

3- Do prices tend to become more or less flexible as time passes? If there is a trend, how does it affect macroeconomics?

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