1.8 The market mechanism, market failure and government intervention in markets Flashcards
1
Q
what is the market mechanism
A
a term that describes how price and quantity of goods and services are determined by the interaction of producers and consumers
2
Q
what is the price mechanism.
A
The way in which prices are determined through the forces of supply and demand.
3
Q
who was the price mechanism described by and why
A
Adam smith, price mechanism can be seen as an invisible hand that guides resources to satisfy wants and needs.
