Question

Do the forces of supply and demand have any influence on prices set by price-setting systems? explain

Answer 1

Yes, supply and demand affects the changes of prices in a price-setting

system because of law of supply and demand.

The law of supply and demand is an economic theory which explains that  how supply and demand are related to each other. It's a fundamental economic principle that when  the supply exceeds demand  the prices will fall. When demand exceeds supply, prices rise.

If there is an increase in supply for goods and services while demand remains the same, prices always fall to a lower equilibrium price and a higher equilibrium quantity of goods and services.

If there is a decrease in supply of goods and services while demand remains the same, prices tend to rise  and a lower quantity of goods and services.

The same inverse relationship is applicable  for the demand for goods and services. However, when  the demand increases and supply remains the same, the higher demand will  lead to a higher equilibrium price and vice versa.

To know more about law of supply and demand here:

brainly.com/question/4596280

#SPJ4