Explain Why the Price of a Good Tends to Fall

question 37

Essay

Explain why the price of a good tends to fall when there is a surplus of the good.Give a hypothetical numerical example to help support your answer.

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Definitions:

Written Contracts

Agreements that are put in writing and signed by the parties involved, thus providing a legal record.

Enforced

The act of compelling compliance or obedience to a law, rule, agreement, or obligation through legal or authoritative means.

Intended Beneficiary

A third party to a contract whom the contracting parties intended to benefit directly from their contact.

Prenuptial Agreement

A contract entered into prior to marriage specifying the distribution of assets in the event of divorce or death.