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In free markets the price of a product depends on how much consumers are willing and able to buy and how much the producers are willing and able to sell. What does the market price depend on in a free market?

Respuesta :

Answer:

MARKET DEMAND = MARKET SUPPLY

Explanation:

Market Demand & Market Supply are the quantities all consumers & all the producers are able , willing to consume & supply respectively ;  during a given period at a given price .

Market Price , quantity is determined where : market demand = market supply & market demand , supply curves intersect each other .

If market demand > market supply : Excess demand creates competition among buyers & increases prices , which reduces demand & raises supply (law of demand & supply) . This happens till Demand = Supply again

If market supply > market demand : Excess supply creates competition among sellers & decreases prices , which raises demand & reduces supply (law of demand & supply) . This happens till Demand = Supply again .

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