According to resources on the Pierce College website, the price or market system creates advantages of economic freedom. It also lowers costs. The disadvantages include instability, monopolistic control and income inequality.Know More
According to New York University class resources, a market economy has seven characteristics: people purchase what they demand, money is a necessity, people are forced to sell items for money, firms maximize profit above social needs, money commands discipline over the wealthy, scarce goods become rationed and labor is compensated. From these characteristics come several positive and negative realities.
The cited advantages are expanded to include increased competition, increased foreign investment, more consumer goods and increases in technical skills. Although, the disadvantages listed by NYU read much longer. These include growing unemployment, unequal political influence, increasing environmental destruction, egotistical attitudes, periodic crises and reduced social benefits. NYU also states that it is impossible for a market economy to exist without flaws, as both theoretical and empirical evidence prove against it. Additionally, experiencing economic growth or loss does not eliminate either positive or negative realities, but rather makes them appear smaller relative to their counterpart.
Yet, as Investopedia notes, statements containing subjective opinions (such as the price system) are considered normative economics in contrast to the fact-based characteristic of positive economics.Learn more in Economics
The selling price of copper is influenced largely by macroeconomics, which includes large-scale factors. For instance, one macroeconomic factor is China. It consumes 40 percent of all the world's copper, affecting the prices.Full Answer >
The price elasticity of demand is important because it illustrates the effect that a change in price has on the quantity demanded of a particular good. It may be perfectly elastic, perfectly inelastic or somewhere between the two.Full Answer >
The average price of a gallon of regular gas in 1996 was $1.23. At the start of 1996, the price was about $1.08 per gallon. It steadily rose to end the year at $1.24 per gallon.Full Answer >
Investopedia defines price elasticity of demand as a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. The price elasticity of demand is equal to the percent change in quantity demanded divided by the percent change in price.Full Answer >