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Content: equilibrium price equilibrium price
Critics of supply and demand say the system
does not distribute resources equally. According to Adam Smith, competition fosters efficiency because
producers have to offer the best products at reasonable prices. In New Hampshire, most general stores sell maple syrup and other maple products. Since no one business sells enough maple products to influence the price, this is an example of
pure competition. The automobile industry in a developing country has very few sellers. If one automobile company raises the prices of its trucks by a certain amount, other automobile companies in the industry follow by raising prices by a similar amount. This situation is an example of
an oligopoly. The government permits Electrify, a national electricity provider, to have a monopoly because the cost of supplying the service is so great that new providers cannot compete for sales. As a result, Electrify's prices are set by
government regulation. _____ is the condition of an economy in which unemployment is very high, consumer spending is low, and business output is sharply reduced.