A competitive market for cell phone chargers is in equilibrium.If the price temporarily falls below the equilibrium price:

Question

Quizplus · Accepted Answer

If the price falls below the equilibrium price, the quantity demanded will exceed the quantity supplied, resulting in a shortage. In a competitive market, producers will respond to the shortage by raising prices, which will eventually restore the market to equilibrium. In this situation, producers will have to sell their products at a lower price, resulting in a decrease in producer surplus.

A Competitive Market for Cell Phone Chargers Is in Equilibrium