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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.


Definitions:

National Income

The total income earned by a country's people and businesses, including wages, rent, interest, and profits.

Minimum Wage

The lowest legal hourly pay rate that employers can pay their workers, which is set by government law.

Price of Soybeans

The current market value at which soybeans can be bought or sold.

Normative Statement

Assertions or opinions that express what ought to be, involving value judgments and cannot be tested or verified.

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