Saturday, September 1, 2018

Concept of Price Mechanism

When the supply and demand of goods and services is affected by the prices of goods it comes under a term known as price mechanism. When there is an increase in demand, the price will go higher which change the supply curve also.

Example-
During bird flu when there is a shortage in the demand of chicken the price of Chicken rises in the market and when that gets over the price again comes to normal price.So here the Demand is same but the supply of chicken is low, so the price is getting increased due to lack of supply.

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