What's it: An auction is a selling method where prices have not yet been set and are determined through an open and competitive bidding process. The auctioneer acts as the selling agent in most cases and receives a commission on the sale
Market Equilibrium
Deadweight Loss: How to Calculate, Example
What's it: Deadweight loss is the loss of surplus by producers or consumers because the market is in disequilibrium. These losses reduce the economic surplus (social welfare) because it is not captured by either party transacting in the market
Market Equilibrium: Meaning, How It Works
Market equilibrium occurs when the quantity demanded is equal to the quantity supplied. In a curve, it represents the point of intersection between the demand curve and the supply curve.At the equilibrium point, the market determines prices and
Market Mechanism: Meaning, How It Works
In economics, a market mechanism refers to a system of market work in which the power of supply and demand determines the price and quantity of goods traded. This mechanism allows the market to go to a new equilibrium point when disequilibrium
Excess Supply: Meaning, How to Calculate, Causes, Impacts
Excess supply occurs when the quantity supplied is higher than the quantity demanded. In this situation, price is above the equilibrium price, and, therefore, there is downward pressure on the price.This term also refers to production surplus,
Excess Demand: Meaning, How to Calculate, Causes
Excess demand occurs when the quantity demanded exceeds the quantity supplied. In this situation, the market price is below the equilibrium price. And, when the mechanism works, the price will rise towards its new equilibrium.The term we also
Consumer surplus: Definition, Formula and Implication
What's it: Consumer surplus refers to the difference between the highest price consumers are willing to pay and the actual price they pay for a good or service.For example, you are willing to pay Rp6 to buy a product. In the market, you come