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In a free market setting where quantity supplied is 40 units and quantity demanded is 50 units, price will:

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User Namrata
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1 Answer

3 votes

Answer: Increase

Step-by-step explanation:

According to the Law of Supply and Demand, If the demand for the good is higher than the supply, the price will be higher to reflect the relative scarcity and if the demand is lower than supply, the price will be lower to reflect the relative excess.

In this case the quantity demanded is higher than the quantity supplied so the price will have to increase to reflect the relative scarcity of the good.

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User Nivaldo
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