ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When excess demand occurs in an unregulated market, there is a tendency for?A. price to fallB. quantity supplied to decrease.C. price to riseD. quantity demanded to increase
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A
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B
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C
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D
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Explanation:
Detailed explanation-1: -When excess demand occurs in an unregulated market, there is a tendency for: price to rise.
Detailed explanation-2: -Excess demand will cause the price to rise, and as price rises producers are willing to sell more, thereby increasing output.
Detailed explanation-3: -Excess Demand When price is below equilibrium and the product sells out quickly, competition among consumers, along with recognition by producers that they could raise price and still sell all units, leads to upward pressure on prices.
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