In the chapter it was discussed how prices are set in the real world. The simple fact is that consumers do not calculate demand curves and firms do not generally calculate their supply curves. Despite this, the supply and demand model can often be used to approximate real world prices. Keeping this in mind, consider a market in which you regularly participate. What type of price determination do you think takes place in this market? Why?

In the chapter it was discussed how prices are set in the real world. The simple fact is that consumers do not calculate demand curves and firms do not generally calculate their supply curves. Despite this, the supply and demand model can often be used to approximate real world prices. Keeping this in mind, consider a market in which you regularly participate. What type of price determination do you think takes place in this market? Why?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter4: Demand, Supply, And Market Equilibrium

Section: Chapter Questions

Problem 25P

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