Thursday, October 4, 2012

Mankiw economic circle

Chapter 7

A inbuilt animosity seems apparent between the seller, the producer, and the consumer.  Surpluses and shortages affect the various parts of the circle.  A low price and cause a surplus.  A seller may want to hold back until a better price occurs.  A surplus can occur anywhere in the circle.  Surpluses affect the prices.  The whole circle benefits when the surplus is controlled.  A good example--ticket price, especially from scalpers.

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