4.3 Market Equilibrium: Bringing Demand and Supply Together

-Figure 4.2 illustrates the supply and demand for t-shirts. If the actual price of t-shirts is $7, we would expect that

Question

4.3 Market Equilibrium: Bringing Demand and Supply Together
 
-Figure 4.2 illustrates the supply and demand for t-shirts. If the actual price of t-shirts is $7, we would expect that

Quizplus · Accepted Answer

When the actual price is below the equilibrium price, there is excess demand (more people want to buy the product than is available), which typically leads to an increase in price until the quantity demanded equals the quantity supplied, restoring market equilibrium.