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Table 3: Supply and Demand

Оглавление

In Table 3, 50 units will sell at $100. Fewer than 50 units will sell at a price higher than $100 and more units will sell at prices lower than $100.

In Table 4, the point of equilibrium (e) is reached by the intersection of supply at 100 units and at a price of $33.

Large quantities in the presence of low demand means low prices. Supply will increase in the presence of high prices and therefore glut the market, forcing prices down. In reverse, a shortage of inventory in the presence of constant demand forces prices up. The whole system finds equilibrium where the two are balanced.

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