Attempts to Repeal the Laws of Supply and Demand - The Market Strikes Assignment

Attempts to Repeal the Laws of Supply and Demand - The Market Strikes Back - Assignment Example Ultimately, the demand-supply coordinates are violated, hence shifting the curve principles outside the principle factors. The free market prices are fixed by the demand-supply laws; however when the law is not adhered to then this leads to what is known as cost distortion. While governments would impose price controls or create policies that would create crushing relationship between supply and demand, this would artificially distract the market mechanism. Hence, the cost dilemma would alter the relevance of the commodities and may lead to specific losses and out- of-the- market experiences. The market’s response to this would be termed in a balanced experience. The price in such instance would not fall below a specific level, known as â€Å"Price Floor’ and an attempt to repeal this would constitute to ‘product vacuum’ and would create scarcity and eventually imbalances in demand-supply