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Economics Assignment范文:政府对经济的影响 Effects of the Government on the Economy(4)

时间:2017-12-27 15:40来源:www.ukthesis.org 作者:英国论文网 点击联系客服: 客服:Damien
 
Task 3:
In this particular task I am going to explain how an equilibrium price and equilibrium quantity can be achieved and also the effects of excess supply, demand on market equilibrium.
 
According to David Begg "economic equilibrium is a state of the world where economic forces are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. It is the point at which quantity demanded and quantities supplied are equal, for example, refers to a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers".
 
Price controls are government rules or laws that forbid the adjustment of prices to clear market for instance we can assume that when price controls are maintained for many years they may have further repercussions. For example many countries have imposed rent controls limiting the rent a landlord can charge for accommodation. Countries such as the UK have had price ceilings for many years in the rental market in also failed to raise insignificant amount with the inflation therefore many private landlord have quit the business.
 
There are many reasons why government wish to intervene in a free market to set prices as a result prices are set the market forces ( where demand and supply vary) but in some cases government will need to set prices for different products. For instance the European Union EU has used minimum prices for farmers it is also could be argued farmers' incomes are too low therefore minimum prices can be used to increase prices above the equilibrium however the government decided to have price controls in farming to encourage farmers to supply as much as possible.
 
This graph show us the existing relation between equilibrium price and demand and also how an equilibrium price and equilibrium quantity can be achieved however we could conclude on this task that equilibrium price is the price at which the quantity demanded by consumers and the quantity at which companies offer services and goods .
 
Task 4:
Perfect competition: Economist definition of perfect competition is different from the meaning of competition in everyday usage in economic theory a perfect competition can be defined as a "description of markets such that no participants are large enough to have the market power to set the price of a homogeneous product. Because the conditions for perfect competition are strict, there are few if any perfectly competitive markets. Still, buyers and sellers in some auction-type markets say for commodities or some financial assets may approximate the concept".
 
Economic markets in many sectors can be described by the term oligopoly this is where few producers dominate the majority of the industry and the market, perfect competition operate on a number of different assumptions. Economist also assumes there a number of a different buyers and sellers in the marketplace this could lead to a perfect competition in the market which could allow price to change in demand and supply.(责任编辑:BUG)


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