9. what are market price fluctuating but not fixed in a market economy? What makes prices change?

The market price is the one at which the quantity demanded is equal to quantity supplied. Based on the def, supply and demand are two decisive factors in determining the market price. Therefore, the changes in supply and demand make their prices fluctuate.

Demand is affected by prices of related goods including complements and substitutes. Substitutes are goods or services for which an increase (or decrease) in the price of one increase (or decrease) the quantity demanded of the other. Complements are goods and services for which an increase (or decrease) in the price of one decrease (or increase) the quantity demanded of the other. Consumer income is another factor.When incomes rise, the demand for most goods will increase, and vice versa. Moreover, when incomes rise, the demand for inferior good will decrease, instead the demand for normal good will increase. Consumer tastes is one of the thing that affect on market price, making market price fluctuating.

Supply is affected by technology, input cost and gov. regulations. A reduction in input cost will reduce the price of product and vice versa. Similarly, the more technology is modern, the more the quantity increases and then, the price will be at lower level. Gov. puts high taxes on income => supply decrease. Gov. puts high taxes on import => supply increase.