Question

The central role of markets is to determine the​

Answer 1

Answer:

Concept:

Markets help to determine a state of equilibrium in the economy.

Solution:

The central role of markets is to regulate the demand and supply in the economy. Through this regulation, it gives us the equilibrium price and quantity.

Answer 2

Central role of markets is to determine the prices.

1. Markets is a place where interaction between buyers and sellers takes place.
2. Here, those who want to sell are able to sell and those who wish to purchase are able to purchase at a given price.
3. The supply and demand are self regulatory and they determine the price in the market.
4. If there is shortage of a good then supply in the market will fall and therefore price will rise, vice versa.
5. If there is excess demand then the price will rise and vice versa.
6. Market also allows the consumers to choose from a given variety of product.