Asked by
Dusti Coker
on Oct 13, 2024
Verified
When market price is below equilibrium price
A) a shortage is generated.
B) a surplus is generated.
C) quantity demanded is greater than quantity supplied.
D) then both a shortage is generated and quantity demanded is greater than quantity supplied,but a surplus is not generated.
E) then both a surplus is generated and quantity demanded is greater than quantity supplied,but a shortage is not generated.
Equilibrium Price
The price at which the quantity of a product offered is equal to the quantity of the product in demand, thus balancing supply and demand.
Surplus
A situation where the quantity of a good or service supplied exceeds the quantity demanded at the current price, often leading to a decrease in price.
- Determine the circumstances that lead to the occurrence of surpluses and shortages in the marketplace.
- Differentiate the notions of surplus demand and surplus supply.
Verified Answer
SA
Learning Objectives
- Determine the circumstances that lead to the occurrence of surpluses and shortages in the marketplace.
- Differentiate the notions of surplus demand and surplus supply.
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