Question

What is meant by market period?

What is a market period?

Answer 1

1. Market period is a very short period in which the supply is fixed. The maximum supply in the market period is the stock of the good that has already been produced.
2. This is the case with the supply of perishable goods. For instance, once the vegetables have been grown and brought to the vegetable market, there cannot be any change in the supply of vegetables, no matter what the price is.
3. Thus, in the market period, firms cannot adjust their output to any change in price.