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In: Economics

Enoch's endowment this year is such that he is a buyer of good 2 and a...

Enoch's endowment this year is such that he is a buyer of good 2 and a seller of good 1. If the price of good 2 decreases before he can buy or sell any of his original endowment, will he remain a buyer of good 2 or switch to become a seller of good 2?

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Expert Solution

Since Enoch's endowment is such that he is a buyer of Good 2. When price of Good 2 decreases, he will not switch to become a seller of Good 2. When price of Good 2 decreases, He'll remain a buyer of Good 2.

Rahul Sunny answered 1 year ago
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