--%>

Competitive market economy will make the needed adjustments

Briefly explain how the competitive market economy will make the needed adjustments to reestablish an efficient allocation of society’s scarce resources?

E

Expert

Verified

They will also be able to pay higher wages and bid workers away from alternative employment.  Bagel manufacturing firms will also be willing to pay higher prices for flour and other ingredients.  They will be likely to buy additional capital equipment and expand their facilities.  Cereal manufacturers will cut production, lay off workers and reduce purchases of materials.  They may have to close facilities and offer their used capital equipment and unneeded land for sale at reduced prices.

   Related Questions in Business Economics

  • Q : The market system provides such a

    Explain the statements: The market system provides such a variety of desired goods and services precisely.

  • Q : Illustrate Rational Behaviour of

    Illustrate Rational Behaviour of Economic Perspective?

  • Q : Expiation of Economists for Economic

    Please help me to solve the problem of economic that is given below: Economists describe economic costs as like: (w) money outlays. (x) accounting cost. (y) opportunity cost. (z) v

  • Q : Raising consumer surplus problem For

    For the question below, utilize the given information. The market for gizmos is competitive, with an increasing sloping supply curve and a downward sloping demand curve. With no govt. intervention, the equilibrium price is $25 and the equilibrium quantity is 10,000 gi

  • Q : Loathed monopolization and viewed of

    Adam Smith and most of the typical economists who followed instantly in his footsteps: (i) viewed monopoly as no big problem. (ii) encouraged monopolies due to their research and development abilities. (iii) thought monopoly power was a communist plot

  • Q : Define the ability of goods by wealth

    According to Adam Smith nation's wealth is, not the gold this possesses, but somewhat it’s: (1) number of people. (2) capability to give goods for its people. (3) foreign investments. (4) domestic financial capital. (5) militar

  • Q : Problem on Legislature budget XY School

    XY School District has a large number of students in need of remedial instruction. The superintendent of XY School System can allocated her budget between purchasing X units of remedial instruction at a price of $2,000/unit and spending an amount ($Y) on all other sch

  • Q : Subjective aspects of pricing- economic

    Adam Smith must have emphasized more strongly how his Wealth of Nations drew concepts and inspiration by Richard Cantillon’s Essai. Now today’s perspective that the Wealth of Nations would considered even

  • Q : Nature and Scope of Economics Nature

    Nature and Scope of Economics: Introduction Economics is a social science that

  • Q : Market efficiency while transaction

    Transaction costs tend to be decreased and markets are more efficient when: (w) the government subsidizes a good. (x) inter-market price differentials are eliminated through arbitrage. (y) taxes are used to give for social wants. (z) regulations close