a. there is a surplus and the price will rise.
b. the quantity demanded is equal to the quantity supplied and the price remains unchanged.
c. there is a surplus and the price will fall.
d. there is a shortage and the price will rise.
e. there is a shortage and the price will fall.
1 answer
The correct answer is:
d. there is a shortage and the price will rise.
When the price of a good is below the equilibrium price, the quantity demanded exceeds the quantity supplied, resulting in a shortage. This imbalance will typically cause prices to rise until equilibrium is restored.
