How is the market clearing price established in a perfectly competitive industry?
What will be an ideal response?
The market clearing price is established by the forces of market supply and demand. Market demand is determined collectively by the buyers. Market supply is determined collectively by the suppliers. Even though each individual supplier or buyer has no control on the price of the product in a perfectly competitive industry, the interaction of all the buyers and suppliers determines the price.
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According to the U.S. Secret Service, approximately $2.6 billion of U.S. paper currency in circulation is counterfeit. As long as counterfeit U.S. currency remains undetected and in circulation, an increase in the U.S
inflation rate would essentially A) decrease the real value of the counterfeit currency. B) increase the nominal value of the counterfeit currency. C) increase the real value of the counterfeit currency. D) decrease the nominal value of the counterfeit currency.
Appreciation of the dollar means that
a. the value of the dollar has decreased. b. the value of foreign exchange has increased. c. fewer dollars are required to purchase foreign exchange. d. more dollars are required to purchase foreign exchange.
Cost-push inflation can be described as a rightward shift of the aggregate supply curve.
Answer the following statement true (T) or false (F)
According to some environmental groups, free trade policies are potentially harmful to the environment.
Answer the following statement true (T) or false (F)