Question

Write three characteristics of normal price

Answer 1

Explanation:

According to Professor Marshall, Normal or Natural Price of a commodity is that which economic forces would tend to bring about in the long run. Professor Marshall referred the short-period normal price as Sub-Normal Price. Therefore, the normal price has been bifurcated into:

Short-Period Normal Price

Long-Period Normal Price

(a) Short-Period Normal Price: Short period of time refers to the time which is not sufficient for supply to adjust itself to demand completely. Supply can be adjusted completely if there is enough time for the factors of production to vary in accordance with the increase or decrease in demand.

(ii) Long-run Normal Price in Constant Cost Industry. Long-run Normal Price in Decreasing Cost Industry, therefore the long-run supply curve of the industry will slope downwards from left to right:

Answer 2

A price is simply the assignment of a numeric value to a product. Prices help us to make everyday economic decisions about our needs are desires. Prices are an indication of the popularity of a product, therefore the more popular the product, the higher the price that can be charged. For example, if you see a table of halter tops for sale you can safely assume that halter tops are not very popular.