The Role of Prices in Regulating Demand and Supply
Order ID |
53563633773 |
Type |
Essay |
Writer Level |
Masters |
Style |
APA |
Sources/References |
4 |
Perfect Number of Pages to Order |
5-10 Pages |
Description/Paper Instructions
The Role of Prices in Regulating Demand and Supply
Prices play a crucial role in regulating demand and supply in any market economy. In a market economy, the forces of demand and supply interact to determine the price of a good or service. This price mechanism acts as a signal for both consumers and producers, providing information on the relative scarcity or abundance of a particular good or service in the market.
The law of demand states that as the price of a good or service increases, the quantity demanded by consumers will decrease, and vice versa. This inverse relationship between price and quantity demanded is the foundation of the demand curve, which shows the quantity of a good or service that consumers are willing and able to purchase at different prices, holding all other factors constant.
Similarly, the law of supply states that as the price of a good or service increases, the quantity supplied by producers will increase, and vice versa. This positive relationship between price and quantity supplied is the foundation of the supply curve, which shows the quantity of a good or service that producers are willing and able to supply at different prices, holding all other factors constant.
The intersection of the demand and supply curves determines the market equilibrium price and quantity, where the quantity demanded by consumers equals the quantity supplied by producers. This market-clearing price signals to both consumers and producers the appropriate level of consumption and production for a particular good or service.
In a free market economy, prices are allowed to adjust to changes in demand and supply without interference from the government or other external factors. This price mechanism allows for the efficient allocation of resources, as prices act as signals for producers to increase or decrease production based on changes in demand, and for consumers to adjust their consumption based on changes in price.
For example, if the price of a particular good increases, consumers may choose to purchase less of that good and instead substitute with a similar but cheaper alternative. Producers, on the other hand, will be incentivized to increase production to take advantage of the higher price and the potential for increased profits. As a result, the market will reach a new equilibrium price and quantity, which reflects the changes in demand and supply.
Similarly, if the price of a particular good decreases, consumers may choose to purchase more of that good, and producers may decrease production in response to the lower price. This adjustment in production and consumption helps to regulate the market and ensure that supply meets demand at a given price.
Prices also play a role in signaling the scarcity or abundance of resources. When the price of a particular good or service is high, it signals that resources are relatively scarce in relation to demand. This high price will incentivize producers to increase production or find alternative sources of inputs to take advantage of the higher profits. Similarly, when the price of a particular good or service is low, it signals that resources are relatively abundant, and producers may choose to decrease production or allocate resources to other goods or services with higher demand and prices.
In conclusion, prices play a critical role in regulating demand and supply in a market economy. The price mechanism acts as a signal for both consumers and producers, providing information on the relative scarcity or abundance of a particular good or service in the market. The efficient allocation of resources relies on the price mechanism to ensure that supply meets demand at a given price. As such, prices provide valuable information to market participants, which enables them to make informed decisions and adjust their behavior accordingly.
The Role of Prices in Regulating Demand and Supply
RUBRIC
QUALITY OF RESPONSE |
NO RESPONSE |
POOR / UNSATISFACTORY |
SATISFACTORY |
GOOD |
EXCELLENT |
Content (worth a maximum of 50% of the total points) |
Zero points: Student failed to submit the final paper. |
20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. |
30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. |
40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. |
50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. |
Use of Sources (worth a maximum of 20% of the total points). |
Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. |
5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. |
10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. |
15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. |
20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. |
Grammar (worth maximum of 20% of total points) |
Zero points: Student failed to submit the final paper. |
5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors |
10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors |
15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. |
20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. |
Structure of the Paper (worth 10% of total points) |
Zero points: Student failed to submit the final paper. |
3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. |
5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper |
7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. |
10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. |
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