Why should an equilibrium price be allowed to stay?
- Posted:
- 3+ months ago by Meng Raym...
- Topics:
- price, stay
Answers (1)
You are talking code words. "Equilibrium price" is not a carefully defined term. It means whatever you say it means. "Allowed" prompts the question "Who does the allowing?"
In a free market the price is set by agreement between seller and buyer. Every price is an equilibrium price, and "allowed" means nothing. So you must be talking about an unfree market, and that always means everything is determined by political influence and enforced by cops, in which case "equilibrium price" means nothing.
You need to examine your assumptions and consider what the words mean. Everybody uses code words and assumes that you know what they mean. But you don't always think those words mean the same things that others think they mean. Life gets very complicated that way.
When you study economics, always remember that politics and economics are not the same thing but they are always intimately connected, and politicians usually know nothing about economics. They think everything is subject to their control. They control things to death.