Answer to Question #249521 in Macroeconomics for Aminata Samba

Question

Explain the assumption for the market clearing condition

Answer 1

A market clearing is an economic assumption that the quantity supplied will be equal to the amount demanded. It combines the premise of perfect competition and Say's law. The two hypotheses state that the number of products and services supplied at a given price will equal the number of goods and services demanded in a perfect competition market, clearing all the goods and services at a given equilibrium point.