Assume the Current Price of Good X Is Too High,i

question 9

Essay

Assume the current price of good X is too high,i.e.,it is above the equilibrium price.Describe the changes that would occur in a market as a result,i.e.,explain how the market would adjust to equilibrium.

---

Definitions:

Bananas

A type of elongated, edible fruit produced by several kinds of large herbaceous flowering plants in the genus Musa.

Comparative Advantage

The ability of a country or firm to produce a particular good or service more efficiently than other goods or services, relative to other countries or firms.

Opportunity Cost

The sacrifice of potential advantages from different alternatives when opting for a particular one.

Production Cost

The total cost incurred by a firm in producing a specific quantity of a good or service, including both fixed and variable costs.