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Let's assume familiarity with the S&D model's components for now. Imagine a seller comes to the market anticipating price A. (Their anticipation is wrong, the real price is equilibrium, found by the vertical height where S&D meet.) They pay workers overtime, hire a few extra workers to produce F units, and this drives their costs up. When they ...


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When the supply fully meets demand, there is no deficit of goods and price depicts Cost+General markup in the market. So the price is equal and fair for all participants of the market. When supply is greater than demand, there are too many goods, so the price has to go down for you to sell goods and as a supplier you need to sacrifice either cost(quality) or ...


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