Price mechanism
What Price mechanism means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Price mechanism
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Reference: Pearson Edexcel
Signals potential market growth to firms and investors, for example through higher prices when demand rises.
The mechanism of price adjustment, such as how excess demand or excess supply leads to a new equilibrium.
Topics that use Price mechanism
- Price determination (Pearson Edexcel A-Level)
- Price mechanism (Pearson Edexcel A-Level)
Related terms
- Market dynamics
- Capacity utilisation
- Ceteris paribus
- Excess demand
- Excess supply
- Incentives and rationing
- Market equilibrium
- Market-clearing price
Using Price mechanism in the exam
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