A price fixed below the equilibrium price of a product will cause a shortage of that product.

Name: A price fixed below the equilibrium price of a product will cause a shortage of that product.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When the price is fixed below the equilibrium price, the quantity demanded of the product will increase while the quantity supplied will decrease. This will create a shortage of the product as the demand for the product cannot be met by the lower quantity supplied at the fixed price.

A Price Fixed Below the Equilibrium Price of a Product