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  • 11-02-2019
  • Business
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how is a shortage or a surplus corrected

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MrCreighton
MrCreighton MrCreighton
  • 11-02-2019

The answer to this question lies in the law of supply and demand. The steering force in determining supply and demand is price.

Therefore, if you have a shortage, price will go up. This will drive demand down.

If you have a surplus, price will go down. This will entice more people to buy your product thus reducing your surplus.

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