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MARKET EQUILIBRIUM AND GOV INTERVENTION
Define what is meant by market equilibrium. With the aid of diagrams, explain how market forces determine equilibrium price and quantity. Discuss the reasons for and methods of government intervention in markets.
A particularly notable feature of market economies is the effect of the price mechanism on demand and supply. The price mechanism determines the equilibrium in the market and is the interplay of the forces of supply and demand in determining the prices at which commodities will be brought and sold in the market. Market Equilibrium is the situation where, at a certain price level,…
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