Economic theory to analyze the potential market

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As we all know that at present it is not legal for parents who wish to adopt a child to pay the birth mother for, or to offer to pay for, the babies they adopt. [Adoption agencies do charge for their services, of course.] Use economic theory to analyze the (potential) market for adoptive babies and answer this: what would happen if such payments were allowed? (Draw yourself a supply-and-demand graph to help you think about this question.)

Reference no: EM1374361

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