When the price is less than the equilibrium price

Question

Quizplus · Accepted Answer

When the price is less than the equilibrium price, there will indeed be a shortage because the quantity demanded exceeds the quantity supplied at that price. This situation leads to some consumers being willing to pay more than the prevailing price to obtain the good, which in turn puts upward pressure on the price, moving it towards equilibrium. Thus, all of the statements are correct in this context.

When the Price Is Less Than the Equilibrium Price