Further, the effect of mandating a higher price transfers some of the producer surplus, while creating a deadweight loss as the price moves upward from the equilibrium price.
42.
This is possible because each short-run equilibrium price will be a function of the prevailing capacity, and the change of capacity will be determined by the prevailing price.
43.
An increase in technological usage or know-how or a decrease in costs would have the effect of increasing the quantity supplied at each price, thus reducing the equilibrium price.
44.
In this model, a Central Planning Board ( CPB ) would be responsible for setting prices through a trial-and-error approach to establish equilibrium prices, effectively running a Walrasian auction.
45.
He demonstrated that if the initial price vector is not the equilibrium price vector, this process will generate a cycle of non-equilibrium price vectors and never converge to the equilibrium.
46.
So, basically, the " market " is at work 24 hours a day, 7 days a week ( the free market forces in equilibrium price through supply and demand ).
47.
He demonstrated that if the initial price vector is not the equilibrium price vector, this process will generate a cycle of non-equilibrium price vectors and never converge to the equilibrium.
48.
An important concept for evaluating an asset's exposure to systematic risk is capital asset pricing model ( CAPM ) directly ties an asset's equilibrium price to its exposure to systematic risk.
49.
The phrase " . . . possible equilibrium prices for an equivalent domestically produced good . " in the first definition ( above ) is normally qualified by the following considerations:
50.
If buyers are patient enough they will not buy until the price falls and so durable goods monopolists face a horizontal demand curve at the equilibrium price and so will have no market power.
