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So, according to economists, marginal utility explains why the price of diamonds are higher than the price of water. But I don’t know why that’s necessarily the case. Yes, it’s true that the marginal …

"The more of something there is, the less valuable it is" is a common way I hear Supply & Demand explained, but it doesn’t make much intuitive sense to me. Why exactly does a unit of something become …

I know ideally a producer is supposed to sell the equilibrium quantity for the equilibrium price. But is there a reason why a producer wouldn’t produce a quantity higher than the equilibrium quantity …

Let’s say a producer supplies 100 units of some good but consumers will only demand 100 units if the price is zero. For every dollar the producer charges per unit, 1 consumer is lost. So if he priced …

According to supply and demand, when there’s an increase in supply, resulting in a surplus, the price falls till it reaches equilibrium. But how exactly does this work? Let’s say the equilibrium is 20 …

For simplicity sake, let’s assume I am the only supplier in a market and have the same goal of making profit as other firms do. Let’s say I produce 300 units of some good. I look at the demand schedul …

I’ve been reading about supply and demand and I don’t know if I’m misinterpreting, but it seems like what they’re saying is that when the quantity supplied of something increases, the quantity demande …

I’ve been told that under perfect competition, an individual producer is a price-taker and has no influence on the market equilibrium price. But this doesn’t make sense to me since the market equilibr …

I am reading an article about price-takers versus price-makers and it says the following: A Price Maker has the ability to alter the output of its product at any time to suit its needs for profit max …

My question is regarding the image below: It says “given a surplus, the price will fall quickly toward the equilibrium level of 6 dollars” but there will still be a quantity left over if the price dr …

I have made several other posts about this topic, but all the answers I got confused me even more. This is my attempt at making a comprehensive post that highlights my confusion about perfect competit …

I am reading a book on economics and it says that more supply equals less demand because people won’t pay a high price for things that are plentiful: "high supply will push prices down as consumers wi …

My question is regarding the problem in the image above. As you can see, it says that if I have 300 tons priced at 150 dollars per ton, I should lower my price to the equilibrium price of 100 dollars …

I keep hearing that under perfect competition, an individual firm can sell ANY quantity as long as they sell at the equilibrium price. But this doesn’t make sense to me. For the market supply and dema …