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Because markets cannot adjust instantly, and even if they could they would still adjust constantly. These levels change because the factors of production are constantly changing. Imagine a market for a particular good is in perfect equilibrium - say for cars. Now say that a worker on the factory assembly line that builds that car decides to retire. The factory now must train a new worker, which will cost money, deal with the fact that they aren't as fast or efficient at their job as the previous, more experienced worker, which will cost money, etc etc etc. This simply act by one worker on an assembly line would throw the whole equilibrium out of whack, forcing an adjustment. Now think of all the other things that go on that would affect the assembly of cars.

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Q: Why do prices and production levels often change?
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What describes market prices that change often and to a great degree with dramatic spikes and plunges?

Volatile is the word that best describes market prices that change often and to a great degree with dramatic spikes and plunges.


What is vertical integration?

It is a system of controlling all the businesses involved in the phases of production. It is often aimed at controlling the prices for a product by eliminating the competition.


Why agricultural prices tend to fluctuate more than non agricultural products?

Agricultural prices are subject to more frequent fluctuations compared to non-agricultural products due to several factors. Firstly, agricultural production heavily relies on weather conditions, which can be unpredictable and vary significantly from season to season. Secondly, the supply chain for agricultural products is often longer and more complex, which can cause disruptions and affect prices.


Why do prices and production often change?

Because markets cannot adjust instantly, and even if they could they would still adjust constantly. These levels change because the factors of production are constantly changing. Imagine a market for a particular good is in perfect equilibrium - say for cars. Now say that a worker on the factory assembly line that builds that car decides to retire. The factory now must train a new worker, which will cost money, deal with the fact that they aren't as fast or efficient at their job as the previous, more experienced worker, which will cost money, etc etc etc. This simply act by one worker on an assembly line would throw the whole equilibrium out of whack, forcing an adjustment. Now think of all the other things that go on that would affect the assembly of cars.


What are high prices often caused by?

low supply high demand.

Related questions

What describes market prices that change often and to a great degree with dramatic spikes and plunges?

Volatile is the word that best describes market prices that change often and to a great degree with dramatic spikes and plunges.


What best describes market prices that change often and to a great degree with dramatic spikes and plunges?

Volatile is the word that best describes market prices that change often and to a great degree with dramatic spikes and plunges.


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