If the market price is below the equilibrium price ?
Correct answer: A. quantity demanded will be greater than quantity supplied
- A. quantity demanded will be greater than quantity supplied
- B. quantity demanded will be less than quantity supplied
- C. demand will be less than supply.
- D. quantity demanded will equal quantity supplied .
Explanation
Below the equilibrium price, consumers want to buy more than producers are willing to sell, creating excess demand or a shortage. Competition among buyers tends to push the price upward toward equilibrium.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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