Suppose that the quantity demanded for cars exceeds the quantity supplied of cars.We would expect that:

Question

Quizplus · Accepted Answer

When the quantity demanded of a good exceeds the quantity supplied, there is a shortage in the market. In order to clear the market, sellers will be able to command a higher price for their product, which will increase until the quantity supplied equals the quantity demanded. Therefore, the price of cars will increase.

Suppose That the Quantity Demanded for Cars Exceeds the Quantity