Responses Due In 2 Hours About 75 Words Respond To Two

2 Responses Due In 2 Hours About 75 Wordsrespondtotwo

Respond to two or more of your colleagues' postings in one or more of the following ways: Ask a probing question, share an insight from having read your colleague’s posting, offer and support an opinion, make a suggestion, expand on your colleague’s posting.

Student's posts:

Michael post: When the prices are regulated, the supply, as well as the demand of the fuel, must be affected (Frank et al., 2017). This means that when the prices are set at a level that is lower than the expectations of the suppliers, they shall not be encouraged by such actions. This is because the incentive that attracts the suppliers to supply more into the market is a higher price. When the prices are high, the supply is also higher than normal. However, when the prices are low, the suppliers bring a small quantity into the market.

The amounts of fuel that are demanded in the market by the consumers shall go up as a result of having low prices due to price regulation. (Frank et al., 2017) This is because low prices attract higher demand for the quantity supplied. The implication is that the amounts demanded shall not be met adequately by the quantities supplied into the market. In terms of economic efficiency, a regulated market is better because the buyers in the market are not exploited by traders charging high prices (Frank et al., 2017). Therefore, commodities are only sold and bought at their deserving prices. The extortion in the market by unscrupulous traders is ended when the market is regulated.

A free economy is highly liberal such that traders take advantage of the market conditions according to the quantities supplied. Sometimes, suppliers intentionally hoard commodities to create artificial shortage so that prices would hike, and they would benefit themselves, creating economic inefficiency (Frank et al., 2017). Therefore, economic efficiency is realized under regulated market.

Ashley Post: Supply and demand in a regulated market are affected by market forces. When the prices are high and the demand is high, the supply will be high too. But, when the prices are low and supply is high the demand will also be high or low based on the commodity. Demand affects supply in different ways. When demand is low, the supply can also be low or high resulting in market saturation. When demand is high and prices high, the supply will be high or low based on commodity. The demand and supply will be affected by the rates set by the energy department.

Instead, when demand is high and the market has to regulate the prices and the supply is low, there will be an increase in price. But, when prices are low and demand is low too, the supply will be low too. Thus, the prices will be high since the market will also consider tilting towards the price set by the Energy Department. Thus, a regulated market will offer better efficiency based on the supply and demands of fuel. This is important when developing a free market which will offer regulation based on demand and supply.

The prices will be influenced based on the demands and supplies in the market. Hence, a free market will be a better regulation when dealing with choices, options, and also focusing on changes in the supply and demand for fuel products. References: Frechette, G. R., Lizzeri, A., & Salz, T. (2018). Frictions in a competitive, regulated market: Evidence from taxis (No. w24921). National Bureau of Economic Research.

Paper For Above instruction

Regulation of supply and demand plays a pivotal role in shaping market outcomes, particularly in essential commodities like fuel. Both student responses elaborate on the dynamics between regulation, supply, demand, and economic efficiency, highlighting the complex interactions that influence pricing and market stability.

Michael's post emphasizes the natural response of suppliers and consumers to price regulation. He notes that when prices are set below market expectations, suppliers lack the incentive to increase supply, leading to potential shortages. Conversely, high prices stimulate increased supply, and low prices attract higher demand, which may outstrip supply if not properly regulated (Frank et al., 2017). Michael advocates for market regulation as a means to prevent exploitation by unscrupulous traders who might hoard commodities or create artificial shortages to inflate prices, thus fostering economic efficiency and fairness. Regulation, according to him, curtails market abuses and ensures that commodities are sold at fair prices, aligning with the principles of microeconomics that balance supply, demand, and market welfare.

Ashley's post extends this analysis by focusing on the interactions between demand and supply under regulation. She notes that high prices and demand often lead to increased supply, but the relationship can vary depending on the commodity. She highlights that when supply is low and demand is high, prices tend to rise, prompting the regulatory agencies like the energy department to intervene and stabilize prices. Ashley also points out that regulating prices can help mitigate market saturation and artificially induced shortages, fostering more efficient outcomes (Frechette, Lizzeri, & Salz, 2018). She underscores the importance of balancing demand and supply to prevent market failures and ensure equitable access to fuel, emphasizing that a well-regulated market can adapt to changing conditions, thus optimizing efficiency and consumer welfare.

Both posts underline the importance of regulatory frameworks in managing the natural fluctuations of supply and demand, especially in energy markets where volatility can threaten economic stability. They agree that regulation helps prevent price gouging, control artificial shortages, and promote overall market efficiency. However, they also acknowledge the challenges, such as the risk of regulatory overreach or market distortion, which require careful policy design.

In conclusion, the insights from both students illustrate that a balanced regulatory approach can improve economic efficiency by aligning supply, demand, and pricing mechanisms. Effective regulation ensures that markets remain fair, competitive, and responsive to consumer needs while preventing exploitative practices and artificial manipulations. As energy markets evolve with technological and geopolitical changes, ongoing regulation adaptation will be essential for maintaining market stability and ensuring equitable access to fuel resources.

References

• Frank, R. H., Bernanke, B. S., Antonovics, K., & Heffetz, O. (2017). Principles of microeconomics: A streamlined approach (3rd ed.). McGraw-Hill/Irwin.
• Frechette, G. R., Lizzeri, A., & Salz, T. (2018). Frictions in a competitive, regulated market: Evidence from taxis (No. w24921). National Bureau of Economic Research.