Sunday, February 6, 2011

Economic Thought

The Midwest was recently blanketed with a foot or more of snow.  As people demanded snow removal, the price homeowners were willing to pay increased.  In response to the price increase, any kid with a snow shovel entered the market as a snow remover.  As the number of shovelers increased and the snow gradually disappeared, many exited the market after taking short-run profits.  This is perfect competition.

About the Author: Mike Fladien is a high school Economics and Law teacher in Muscatine, Iowa. He has been called the EconHacker because he has a talent for explaining Economics concepts in a simple language that anyone can understand.

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