In a previous module, the topics of demand behavior and supply behavior were explored in isolation. We now explore demand and supply interactions. The setting in which this interaction occurs is called a market. The term “market” denotes the web of interactions between those who have commercial relationships, or the potential to have such relationships, with other buyers and sellers of similar commodities.
Using your textbook, University online library resources, and the Internet, research supplier-induced demand. Write a paper explaining:
- How price is set in a competitive market
- The conditions that have to be met for market equilibrium to be established
Write a 2- to 3-page paper in Word format. Apply current APA standards for writing style to your work. All written assignments and responses should follow APA rules for attributing sources.