Or, if you prefer, the futility of trying to fix prices at any point other than their market clearing price.
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The same is true of fixing prices above the market clearing price.
Economics has a number of useful concepts to help guide activity in the real world and this one of a market clearing price is one of them.
This is why we have this concept of a market clearing price of course, that being the price at which supply equals demand and the market clears.
Here is the real question to ask if one suspects that speculators are driving the price of oil for current delivery above and beyond the market clearing price: Where is all the extra oil going?
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If people are unemployed, it means the price of labor is artificially high relative to the market-clearing price.
Why don't promoters simply charge a market-clearing price for the tickets instead of bashing middlemen who do?
Hey, the market-clearing price of any security is where supply and demand meet.
"If supply responses and the market-clearing price are not considered, wholesalers and retailers will run out of gasoline and consumers will be worse off, " she says.
"You just want to see the market fall and find its clearing price, " said the trader.
When demand exceeds supply in a normal market, the price rises until it reaches a market-clearing level.
And isn't demand for oil lower than it would have been if the price of oil had been at its true market-clearing level?
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