What is the benefits of market place clearing In relations t

What is the benefits of market place clearing? In relations to health care providers, Is it more beneficial to the supplier of consumer?

Solution

Market place clearing is a process or a procedure in which the price of a good or service at which quantity supplied is equal to quantity demanded. This sets in a perfect equilibrium and the market tends to move towards the price.

The benefits of market clearing are as follows:

1. Market will be in perfect equilibrium.

2. The quantity of goods supplied will be equal to the quantity of goods in demand hence the stocks will get cleared as and when it arrives.

3. Inventory maintenance will be easy.

4. Customers will be benefitted as the products will have an affordable price.

5. There will be no old stocks and customers can buy goods with perfect satisfaction.

With respect to the health care providers, both the supplier and the customer are beneficial as:

1. Patients will be in need of fresh medicines than old stocks, hence they will be able to get new stocks from medical outlets.

2. Suppliers will be able to identify the true demand for all products. People will not go for alternative combination compromising on the price.

3. Consumers will get all products easily as stocks will be cleared then and there.

4. Medicine expiry will not be concern any more.

5. There will be a perfect equilibrium between demand and supply.