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Article: Price
- Article from:
- Gale Encyclopedia of U.S. Economic History
CopyrightCOPYRIGHT 2000 The Gale Group Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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PRICE
Price is the monetary value of a good or service for sale. There are several different kinds of price. Those with the most dominant roles in the marketplace include market price and equilibrium price. Both are tied to the laws of supply and demand.
The market price is the price consumers pay for goods or services in the marketplace. The equilibrium price is an economic ideal. It is the point where the supply of goods is matched equally by consumer demand. For example, if there are more bicycles on the market than there are consumers to buy them, it will create a surplus on the market and the market price of bicycles will go down. If there are more ...