This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: absorb the surplus . Your textbook producers would have a surplus of textbooks. At the end of each edition, the books would be returned to the publisher and the paper was recycled. (c) A third solution was to change the name of the product in order to reduce the price. Surplus gasoline was sold to independent dealers who would sell it as Thrifty, 7-11, or Discount Gas at a lower price. Surplus liquor was bottled with a different label and sold as Slim Price, or Yellow Wrap at a lower price. Surplus washing machines and refrigerators were sold, for example, to Sears and marketed as Kenmore at a lower price. When automobiles were fair-traded, the dealers could not lower the price; however, they would give a trade-in value that was much greater than the trade-in car was actually worth. The main point here is that, even if someone interferes with the market process, there are powerful forces to return to equilibrium...
View Full Document
This note was uploaded on 01/12/2012 for the course ECON 201 taught by Professor Joyce during the Fall '07 term at Drexel.
- Fall '07