Exhibit 3-16 Supply and demand curves for chairs

-In Exhibit 3-16, if the market price of chairs is initially $15, a movement toward equilibrium would require:

Question

​ Exhibit 3-16 Supply and demand curves for chairs
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-In Exhibit 3-16, if the market price of chairs is initially $15, a movement toward equilibrium would require:

Quizplus · Accepted Answer

According to the supply and demand curves in Exhibit 3-16, if the market price of chairs is initially $15, there is excess supply (quantity supplied is greater than quantity demanded), which puts downward pressure on the price. As a result, the price must fall below $15 (movement along the demand curve), causing quantity supplied to fall (movement along the supply curve) and quantity demanded to rise (movement along the demand curve) until the market reaches equilibrium. Therefore, choice D is the most appropriate answer.

​ Exhibit 3-16 Supply and Demand Curves for Chairs

Exhibit 3-16 Supply and Demand Curves for Chairs