Asked by
Edward Hayes [Student]
on Oct 13, 2024
Verified
When market price is below equilibrium price
A) a shortage is generated.
B) market price will rise.
C) quantity demanded is greater than quantity supplied.
D) all of the choices.
Equilibrium Price
The market price at which the quantity of goods supplied is equal to the quantity of goods demanded, also known as the market-clearing price.
Shortage
A scenario in which the need for a product surpasses the amount available at a particular price.
Quantity Demanded
The total amount of goods or services that consumers are willing and able to purchase at a given price level in a given period.
- Understand the conditions that result in the emergence of surpluses and shortages in the market.
- Explain the role of prices as a rationing mechanism in market economies.
- Discern between the concepts of excess demand and excess supply.
Verified Answer
TT
Learning Objectives
- Understand the conditions that result in the emergence of surpluses and shortages in the market.
- Explain the role of prices as a rationing mechanism in market economies.
- Discern between the concepts of excess demand and excess supply.