What will happen to supply of cashews and price of cashews


Suppose that perfectly competitive firms producing cashews discover that P exceeds MC. Will their combined output of cashews be too little, too much, or just right to achieve allocative efficiency? In the long run, what will happen to the supply of cashews and the price of cashews? Use a supply and demand diagram to show how that response will change the total surplus (i.e., combined amount of consumer surplus and producer surplus) in the market for cashews.

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Microeconomics: What will happen to supply of cashews and price of cashews
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