When the market price of a product is below the equilibrium price, shortages will result and sellers can be expected to reduce the supply of that product.

Question

Quizplus · Accepted Answer

When the market price of a product is below the equilibrium price, there will be an excess supply of that product, not a shortage. In this situation, sellers may reduce prices or increase marketing efforts to try and sell more of the product.

When the Market Price of a Product Is Below the Equilibrium