Question

In 3 or 4 sentences, explain the relationship between the equilibrium price and efficiency.

Answer 1

Answer:

In an inefficient economy, there are problems of shortages and surpluses that occur when supply and demand do not align with each other. If the price of a product is too low, suppliers may run out of it or stop making a profit from it because there is no incentive to make more. If prices are too high, suppliers may have product surpluses and customers will either overpay or forego what they need as they cannot afford products