If the current market price of good Z is below the equilibrium price of good Z
A) it must be because the government has imposed a price ceiling in the market for good Z.
B) there is a shortage of good Z.
C) there is a surplus of good Z.
D) demand must necessarily decrease to restore equilibrium.
E) a and b

Question

Quizplus · Accepted Answer

When the current market price of a good is below the equilibrium price, it means that the quantity demanded exceeds the quantity supplied at that price, leading to a shortage. This does not necessarily imply government intervention (a price ceiling) or that demand must decrease to restore equilibrium.

If the Current Market Price of Good Z Is Below