When a shortage occurs,there is a tendency for the
A)price to fall.
B)price to remain unchanged.
C)price to rise.
D)quantity demanded to increase.
E)quantity supplied to decrease.

Question

Quizplus · Accepted Answer

When there is a shortage, demand exceeds supply, which creates a competition among buyers causing them to bid up the price. As the price rises, suppliers are motivated to produce more and add to the quantity supplied, alleviating the shortage. Therefore, in the short run, the price tends to rise until supply catches up with demand.

When a Shortage Occurs,there Is a Tendency for the