1.2.6 Price Determination Flashcards
1
Q
Price determination
A
The use of market forces to allocate resources in order to solve the economic problem of what, how and for whom to produce goods & services for.
2
Q
Static analysis
A
The way the market moves towards the equilibrium through price adjustments and movements along the demand and supply sieve, which assumes the Ceteris Paribus assumption holds true.
3
Q
Comparative static analysis
A
Examines the effect on the equilibrium of a change in the external conditions affecting a market.
