Year: 2025 | Month: March | Volume 70 | Issue 1
Efficient Adjustment of Supply to Demand in a Private Enterprise Economy: A Theoretical Examination
Constantinos Challoumis and Nikolaos Eriotis
DOI:10.46852/0424-2513.1.2025.2
Abstract:
This paper provides a detailed theoretical exploration of how supply adjusts to demand within a private enterprise economy. It extends the basic understanding of market mechanisms by examining the conditions under which resources are allocated efficiently without deliberate government intervention. The analysis delves into the complexities of the allocation process over different time periods, distinguishing between long-run, short-run, and immediate-term adjustments. This theoretical framework considers the role
of market prices, cost minimization, and the decision-making processes of individual entrepreneurs in optimizing supply and demand alignment. Additionally, the paper explores the conditions most favorable for efficient market adjustments, focusing on the importance of accurate information and competitive market structures.
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