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In a small town with no banana sellers but a strong demand for bananas, Peter begins selling them, leading to high initial profits. As he dominates the market, other sellers, noticing his success, enter the banana business. This increase in supply reduces Peter's profits. If more sellers continue to enter without a corresponding rise in demand, the market becomes oversaturated, leading to excess supply. Eventually, some sellers may go out of business, resulting in a market balance where supply meets demand.
