Asked by Sarah Gittins on May 14, 2024
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Surpluses drive market prices up; shortages drive them down.
Surpluses
Situations in which the quantity of a good or service supplied exceeds the quantity demanded at the current price.
Market Prices
Refers to the specific values at which commodities, securities, or services are traded in a competitive marketplace.
Shortages
Occur when the demand for a good or service exceeds its supply in a given market, often leading to price increases.
- Acknowledge the importance of price levels in markets as cues that harmonize the decisions made by purchasers and sellers.
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Learning Objectives
- Acknowledge the importance of price levels in markets as cues that harmonize the decisions made by purchasers and sellers.
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