-When the price of a good is below the equilibrium price,
A)suppliers are unable to sell as many units as they want; they will cut output and lower prices.
B)suppliers can sell as many units as they can produce; they will increase production and raise prices.
C)the demand curve shifts down to reach an equilibrium price.
D)the supply curve will shift up to reach an equilibrium price.

Question

-When the price of a good is below the equilibrium price,
A)suppliers are unable to sell as many units as they want; they will cut output and lower prices. 
B)suppliers can sell as many units as they can produce; they will increase production and raise prices. 
C)the demand curve shifts down to reach an equilibrium price. 
D)the supply curve will shift up to reach an equilibrium price.

Quizplus · Accepted Answer

When the price is below equilibrium, there is excess demand (shortage), prompting suppliers to increase production and raise prices to reach equilibrium.

-When the Price of a Good Is Below the Equilibrium