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Author : ydaugherty
Finance & Accounting
Pages 3 (753 words)
Article Review (Name) (University) Article Review This newsletter emphasizes the essential role prices exhibit in the entire market economy. The article provides a practical understanding for presently shifting market economy landscape, especially on how prices are established as a reaction to both forces of demand and supply…
Consequently, the market experiences a disequilibrium condition in terms of either surpluses or scarcities (Yetter, 2013). Given that, supply and demand assessment can be quite complex, the newsletter helps the reader to separate changes in both demand and supply from activities alongside supply and demand curves. The newsletter offers a practical meaning regarding two forms of government interventions within the markets, comprising price controls and quantity controls. One major supposition deduced from the newsletter is that government price floors tend to form surpluses, since they place prices higher than equilibrium price. As a result, the quantity of goods or service supplied surpasses quantity demanded. On the other hand, government price ceilings tend to form shortages since they institute prices lower than equilibrium, and as a result, the quantity demanded surpasses quantity supplied. However, Mishkin & Eakins (2012), observes that the semi-strong outline in efficient market hypothesis is the one that makes the present market prices to mirror information already present in the public domain. This is because market prices tend to adjust to any good information or bad news contained in the performance of the economy. ...
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