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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:

Reciprocity Norm

A social rule that suggests people should return help and cooperation they have received from others.

Potential Customer

An individual or entity that could be interested in purchasing a product or service, but has not yet decided to do so.

Reactance Response

A psychological reaction that occurs when people feel their freedom to choose or act is threatened, leading them to resist the influence or change.

Foot-in-the Door Technique

A persuasion strategy where a small request is made first in order to increase the likelihood of compliance with a larger request later.

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