If the actual price were below the equilibrium price in the market for bread, a:
A) surplus would develop that cannot be eliminated over time.
B) shortage would develop, which market forces would eliminate over time.
C) surplus would develop, which market forces would eliminate over time.
D) shortage would develop, which market forces would tend to exacerbate.

Question

Quizplus · Accepted Answer

When the actual price is below the equilibrium price, the quantity demanded exceeds the quantity supplied, leading to a shortage. Market forces (higher demand leading to increased prices) would work to eliminate this shortage over time by moving the price towards the equilibrium.

If the Actual Price Were Below the Equilibrium Price in the Market