If prices were always flexible and capable of rapid adjustment, then dealing with situations in which quantities

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If prices were always flexible and capable of rapid adjustment, then dealing with situations in which quantities demanded did not equal quantities supplied would always be easy since prices could simply adjust to the market equilibrium price at which quantities demanded equal quantities supplied. Unfortunately, real-world prices are often inflexible (or “sticky”) in the short run so that the only way for the economy to adjust to such situations is through changes in output levels.

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Economics Principles Problems And Policies

ISBN: 9780073511443

19th Edition

Authors: Campbell Mcconnell ,Stanley Brue ,Sean Flynn

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