If the price was fixed below the equilibrium price there would be ?
Correct answer: B. Excess demand
- A. Excess supply
- B. Excess demand
- C. Equilibrium
- D. Downward pressure on prices
Explanation
A price fixed below equilibrium is a binding price ceiling. At that low price, quantity demanded exceeds quantity supplied, producing excess demand or a shortage.
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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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