Economic theory attempts to derive correct equilibrium prices in the marketplace by comparing supply and demand.

Question

Quizplus · Accepted Answer

Economic theory is based on the fundamental concept of supply and demand, and attempts to analyze and predict the behavior of markets based on these factors. The theory suggests that in a competitive market, the market price of a good or service will be the equilibrium point where supply and demand intersect. Therefore, economic theory does attempt to derive correct equilibrium prices in the marketplace by comparing supply and demand.

Economic Theory Attempts to Derive Correct Equilibrium Prices in the Marketplace