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Explain how the price system eliminates a surplus.
The meaning of surplus is that quantity demanded is less as compared to the quantity supplied. This will lead to downward pressure on price. Since price falls, quantity demanded rises and quantity supplied falls. This will carry on until quantity demanded is equal to quantity supplied.
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herberler theory of opportunity cost
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Economic instruments Financial rewards, incentives and penalties that operate automatically via market forces, to encourage beneficial behavior.
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