Consider the following demand and supply schedules for some agricultural commodity. $$\begin{array} { | c | l | c | }
\hline \text { Price } & \text { Quantity Supplied } & \text { Quantity Demanded } \
\hline \$ 10 & 300 & 1100 \
\hline \$ 30 & 500 & 900 \
\hline \$ 50 & 700 & 700 \
\hline \$ 70 & 900 & 500 \
\hline \$ 90 & 1100 & 300 \
\hline \$ 110 & 1300 & 100 \
\hline
\end{array}$$ TABLE 5- 2
-In free and competitive markets,shortages are eliminated by
A)rationing.
B)price increases.
C)black markets.
D)price decreases.
E)government price controls.

Question

Consider the following demand and supply schedules for some agricultural commodity. $$\begin{array} { | c | l | c | } 
\hline \text { Price } & \text { Quantity Supplied } & \text { Quantity Demanded } \
\hline \$ 10 & 300 & 1100 \
\hline \$ 30 & 500 & 900 \
\hline \$ 50 & 700 & 700 \
\hline \$ 70 & 900 & 500 \
\hline \$ 90 & 1100 & 300 \
\hline \$ 110 & 1300 & 100 \
\hline
\end{array}$$ TABLE 5- 2
-In free and competitive markets,shortages are eliminated by
A)rationing.
B)price increases.
C)black markets.
D)price decreases.
E)government price controls.

Quizplus · Accepted Answer

In free and competitive markets, shortages are eliminated by price increases. As the price of a commodity increases, the quantity supplied will increase and the quantity demanded will decrease, until the market reaches equilibrium.

Consider the Following Demand and Supply Schedules for Some Agricultural