as demand increases, more suppliers enter market. what happens to costs & prices as output increases?

Question

what is this called?

Answer 1

The KEY here lies in understanding the law of supply and demand, and in realizing what drives demand and what drives supply.

Well on the demand side of the equation, increase demand means a higher quantity is demanded by consumers, and the price will rise.

But when suppliers enter the market, the quantity supplied increases, pushing prices down.

So we move from 1 point of equilibrium to a new one. One where the price will lower and the quantity higher.

In other words, as consumers demand more and more, suppliers will enter the market in order to meet that increased demand, which ultimately drops the price and raises the amount of that product (ouput) in the market.

Answer 2

This law is the holy grail of capitalism. It is called the law of supply and demand. People demand more of a product and supplies decrease and prices go up more of the product enters the market prices stabilize, still more enters the market or demand decreases the price goes down. It works as long as there are no artificial caps on the price.

Answer 3

usually the average cost is asymptotic in charactor and diminishes with increase in output. further scale perfoms favourably as output increases.and every chance to get price fall.only when larger and larger the size the industry becomes., scale diseconomies enter &This you can see in the "u" shape of the average cost curve-it fall till the optimum output is reached and the cost increases there after, the price will move up.

Answer 4

this basically signifies that CD gamers might want to be 50% more competitively priced to make. a million. grant might want to boost (yet that relies upon if production unit needs to boost components) 2. call for ought to also boost when you consider that CD gamers will be more competitively priced (imagine about PS3 if the cost falls from $three hundred to $100 and fifty better people will purchase it) 3. cost might want to shrink because its more competitively priced to fabricate 4. volume might want to boost if corporation comes to a call to make better.

Answer 5

Ofocurse prices are going to crash down due to fierce competition in the market.

Answer 6

costs goes up price goes down

Answer 7

there is a surplus and the prices decrease.