If a shortage exists for a good in a free-market economy, the
A) price of the good will rise.
B) price of the good will fall.
C) government will order suppliers to increase the production of that good.
D) government must establish a rationing system to make sure that the good is fairly distributed.

Question

Quizplus · Accepted Answer

In a free-market economy, when there is a shortage of a good, the demand for the good will exceed the supply. This will lead to an increase in the price of the good because consumers will be willing to pay more to obtain the limited supply. Therefore, choice A is the best option.

If a Shortage Exists for a Good in a Free-Market