Report post

What is the relationship between consumer and producer?

The relationship for the consumer is an inverse one: when prices are high consumers buy less, and when prices are low consumers buy more. The same cannot be said for producers. When prices are high they will bring more to the market, and when prices are low they will bring less to the market.

How do prices affect consumers and producers?

The same cannot be said for producers. When prices are high they will bring more to the market, and when prices are low they will bring less to the market. As a result, prices serve as a way for both consumers and producers to determine whether or not they want to buy (demand) or sell (supply/produce) a particular good or service.

What role do prices play in efficiency?

Efficiency, Supply and Demand, and Market Clearing, by Arnold Kling Supply and Demand: Prices play a central role in the efficiency story. Producers and consumers rely on prices as signals of the cost of making substitution decisions at the margin. How are prices determined?

Related articles

The World's Leading Crypto Trading Platform

Get my welcome gifts