Inertia of Competitive Equilibrium Without Price-Makers
In a competitive market, if a demand shock occurs but all participants continue to act strictly as price-takers, the market price will not adjust to the new equilibrium. The transition to a new price level requires some buyers or sellers to recognize the changed conditions and initiate price changes by becoming price-makers.
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Sociology
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Economics
Economy
Introduction to Microeconomics Course
CORE Econ
Ch.8 Supply and demand: Markets with many buyers and sellers - The Economy 2.0 Microeconomics @ CORE Econ
The Economy 2.0 Microeconomics @ CORE Econ
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