When do the laws of supply and demand have less effect on prices?
(1 point)
Responses.
when a good or service is new
when a good or service is new
when outside factors cause changes
when outside factors cause changes
when buyers search for substitutes
when buyers search for substitutes
when sellers want to make more money
when sellers want to make more money
The laws of supply and demand have less effect on prices in the following situations:
1. when a good or service is new
2. when outside factors cause changes
3. when buyers search for substitutes
4. when sellers want to make more money
Note that points 1 and 2 are repeated, suggesting they have a significant impact on diminishing the effect of supply and demand on prices.
The laws of supply and demand generally have a strong effect on prices in the market. However, there are some specific circumstances when their influence may be reduced or altered.
One such circumstance is when a good or service is new. In this case, the laws of supply and demand may not have fully taken hold yet. When a new product or service is introduced, it might not have a well-established market or consumer demand, making it difficult to accurately determine its value. As a result, the usual determinants of supply and demand may have less impact on prices initially.
Similarly, outside factors can also cause changes that reduce the direct influence of supply and demand on prices. For example, changes in government regulations, subsidies, or economic conditions may disrupt the equilibrium between supply and demand. In such cases, prices could be influenced more by these external factors than by the traditional forces of supply and demand.
Another scenario is when buyers actively search for substitutes. If consumers have a wide range of substitute products or services to choose from, they can exert greater leverage on prices. When buyers have more options available, they can easily switch to alternatives if prices rise. This increased consumer power can dampen the impact of supply and demand on prices.
Lastly, the notion that sellers want to make more money could also have an impact on prices. In certain situations, sellers might try to manipulate prices by artificially restricting the supply or creating artificial demand. This can disrupt the regular functioning of supply and demand dynamics and result in prices that deviate from what would typically be expected.
In summary, the laws of supply and demand can have less influence on prices when a good or service is new, when outside factors cause changes, when buyers search for substitutes, or when sellers try to manipulate prices for their own gain.