Question

If, at the current price, there is a shortage of a good, thena. sellers are producing more than buyers wish to buy.b. the market must be in equilibrium.c. the price is below the equilibrium price.and. quantity demanded equals quantity supplied.

Answer 1

C. the price is below the equilibrium price

Step-by-step explanation:

Remember, in the law of demand and supply the quantity supplied is dependent on the value of the price of a good.

In this case the price is below the equilibrium price; meaning demand would be higher than the supply which results in the shortage of the good and the company therefore raises the price of the good.

For example, the price of oranges decrease in the equilibrium price (from $10 to $5), resulting in an increase in the demand for oranges.

The increase in demand would lead to shortage, making farmers increase price wanting to supply more.