Assume that the current market price is below the market clearing level. We would expect:
A) a surplus to accumulate.
B) downward pressure on the current market price.
C) upward pressure on the current market price.
D) lower production during the next time period.

Question

Quizplus · Accepted Answer

When the current market price is below the market clearing level, there is more demand than supply at that price, leading to upward pressure on the current market price to reach equilibrium.

Assume That the Current Market Price Is Below the Market