a. Identify two (2) functions of price in the market economy.
b. Explain how price is determined in the market economy.
c. What are the possible results if the government interferes with the price level that the free market has determined? Explain how those results could occur and illustrate with an appropriate supply and demand graph.
In economics, the market price level of a certain product plays a vital role in the formulation of the market decision behavior of both the buyer and the sellers. Also, the price level can either be market-determined or can be influenced by external forces like government intervention.
Answer and Explanation: 1
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A - the price level plays a vital role in determining the demand behavior and the supply behavior of both the buyers and...
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fromChapter 3 / Lesson 56
In economics, price level refers to the average price for all goods and services presently sold in the marketplace. Explore the definition and equation for price level in economics, review price level changes and ways to measure it, and recognize that the consumer price index is typically used to calculate the current price level.