Welcome to Westonci.ca, where finding answers to your questions is made simple by our community of experts. Discover precise answers to your questions from a wide range of experts on our user-friendly Q&A platform. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.
Sagot :
Yes, supply and demand affects the changes of prices in a price-setting
system because of law of supply and demand.
The law of supply and demand is an economic theory which explains that how supply and demand are related to each other. It's a fundamental economic principle that when the supply exceeds demand the prices will fall. When demand exceeds supply, prices rise.
If there is an increase in supply for goods and services while demand remains the same, prices always fall to a lower equilibrium price and a higher equilibrium quantity of goods and services.
If there is a decrease in supply of goods and services while demand remains the same, prices tend to rise and a lower quantity of goods and services.
The same inverse relationship is applicable for the demand for goods and services. However, when the demand increases and supply remains the same, the higher demand will lead to a higher equilibrium price and vice versa.
To know more about law of supply and demand here:
https://brainly.com/question/4596280
#SPJ4
We hope this information was helpful. Feel free to return anytime for more answers to your questions and concerns. We hope this was helpful. Please come back whenever you need more information or answers to your queries. We're dedicated to helping you find the answers you need at Westonci.ca. Don't hesitate to return for more.
