Question

Suppose you are a T-shirt producer in a market without price controls. You are charging a price that is below the equilibrium price for T-shirts. Market pressures will eventually _____ the price of your T-shirts.

Answer 1

raise

Step-by-step explanation:

In a market without price control, prices are determined by the forces of demand and supply. When price is below equilibrium price, market forces shift the price upward until equilibrium is reached.

If prices are above equilibrium price, market forces shift prices downward until equilibrium price is reached.

Equilibrium price is the price at which quantity supplied equals quantity demanded.