Bilateral Trade

Explain how market forces (the invisible hand) guide consumers and producers toward the equilibrium. Explain how the same process you described in part (a) could result in the socially optimal outcome.

1- [Free Market & Market Failures – 30p] a- Explain how market forces (the invisible hand) guide consumers and producers toward the equilibrium. This requires a complete explanation of why the intersection of supply and demand is the equilibrium. Use supply and demand diagrams for a graphical presentation of your arguments. The graphs and your […]

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