do forces of demand and supply always set market prices.........?

Question

in stable or ideal conditions it is said that the forces of demand and supply set the market price. how does one account for the bargaining power of people in the markets of Ghana nad Nigeria even when it seems they don't have alternatives or substitutes for the products on sale......haggling its called

Answer 1

Haggling is cultural but there are still the laws of supply and demand. The US is almost the only country where a price is set in stone.Haggling is considered rude

Answer 2

Haggling is an example of the forces of supply and demand.

The thing is that haggling shows that the market is very fragmented; each supplier has his/her supply curve, and each consumer has his or her demand curve.

Haggling is the process by which this mini-market attempts to find equilibrium.

After haggling is done, a price is set where quantity demanded equals quantity supplied and the price is determined, or no price is set because there is none (the supplier asking for a higher price than the consumer is willing and able to pay for that product).

In a way, you can think of it as a form of price discrimination, where the price that the supplier can set depends on the consumer's perceived ability to pay, ability to haggle... The lower your ability to pay and the higher your ability to haggle, the lower the price you are likely to end up paying.


Now there are cases where forces of demand and supply do not set market prices. For example, there are goods whose prices are controlled. The government may have imposed legislation fixing a price ceiling, or even a fixed price. Then this distorts the market, and forces the prices lower (for an effective ceiling) that what they would have been without government intervention, and also decrease the quantity traded as compared to the 'free market equilibrium'. Also, because of the low price ceiling, quantity demanded exceeds quantity supply, and we have a shortage.

Answer 3

even when haggling, the final price is set by supply and demand. Unless there's market regulation set in place (for instance say, a price ceiling set by the financial regulator). Another way to look at this is to consider the consumer/ producer surplus and the distribution of benifits on a supply and demand chart. that'd help to clarify your question on how market price is set.

Answer 4

The laws of supply and demand cannot be bypassed anymore than the law of gravity.

If the prices are fixed then the supply will fluctuate. There is always the alternative foregoing the purchase.

Prices were fixed in the 70's in a failed attempt to control inflation. Supplies dried up, also quality deteriorated.

Answer 5

Because in the markets of Ghana and Nigeria, they don't have "set" market prices, everything is negotionable.. Supply and demand sets the pace here is the good ol' USA.

Answer 6

all economic systems are models...... are just ideals. Any time there is free trade you get supply and demand. In capitalist or laissez faire systems and mixed economies consumer sovereignty is what decides what products are on the market, their purchasing choice is the deciding factor for entrepreneurs as in the continuation or discontinuation of a particular good or service.

Answer 7

In a perfectly competitive market, they always set prices. But as in the case of monopolies, the monopolist sets the price.

Hope this helps

Answer 8

supply and demand is only set by big fat dumb americans. the rest of the world has a system where prices can be negotiated. supply and demand just give a close idea.

Answer 9

supply and demand sets the price when bartering aswell. supply and demand dosn't apply when limits are set on the market e.g rationing/price fixing etc..

Answer 10

barter systems are awesome.
but we have capitalization, and that is supply/demand