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?

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter5: Consumer Choice: Individual And Market Demand

Section: Chapter Questions

Problem 2DQ

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