Explain what would happen if, in an unregulated or free market, price were to be higher than the equilibrium?

Answer 1

You would have an excess supply gap that would cause a downward pressure on prices that would drift toward equilibrium

Demand - at a higher price, fewer people will buy the product, cutting back or using substitutes

Supply - at a higher price more companies will decide to produce the product, and existing producers will be happy to produce more

On a graph, these are both movements along your supply and demand curves toward equilibrium where they intersect.

Answer 2

inflation... anyway that's what happens with the ideology that the US and a few other countries are trying to impose to the rest of the world calling it "economic realism". For instance in France a few big telecom companies have been keeping the prices on mobile telecomunications very high over the last 10 years because they had a secret agreement on prices. That's the essence of neocons thought

Answer 3

If I keep in mind properly, which would be called *deflation* and is often seen a prelude to a melancholy, simply by fact expenditures of goods many times do no longer drop that low until there purely isn't adequate funds at *all* stages of society to bypass around. it is likewise a common results of what occurs whilst wealth gets *far* too concentrated into the palms of the few and much less. ultimately the backside falls out of call for, and the provision purely *won't* be bought at any value. Why? Too a lot of human beings, no longer adequate loose funds. observe the be conscious "commonplace" up there inspite of the incontrovertible fact that. as simply by WTO and NAFTA re-defining wages and standards of residing downward on an *aggressive and thoroughly untimely* foundation, the wealthy no longer "could desire to hassle" approximately melancholy. Why? simply by fact there is now *no backside*. Jobs could be outsourced, and if prefer be, *call for for products* could be outsourced too as electorate of stronger international locations and mature economies get further and added *displaced* and *close out* of their very own societies. of course, the entire component stinks and is fully incorrect, simply by fact the third/coming up international purely would not have adequate factors to %. up the slack, in terms of hard artwork, furnish, call for, something, yet do no longer tell them back-stabbing CEOs any of that, they won't hear it. they are too busy enjoying *Highlander* with the wealth of the Earth, reducing Economics to the single that has ALL and the ALL who've NONE.

Answer 4

The demand would go down thus making a product surplus.

Answer 5

bubble and depression as a matter of time as soon as pineering invester realized that the market is over-saturated

Answer 6

it leads to inflation.