In Exhibit 3-15, if the market price of good X is initially $1.50, a movement toward equilibrium requires:

Question

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In Exhibit 3-15, if the market price of good X is initially $1.50, a movement toward equilibrium requires:

Quizplus · Accepted Answer

The market is currently in a state of excess supply (quantity supplied is greater than quantity demanded) at a price of $1.50. This means that producers are willing to sell more than consumers are willing to buy at that price. In order to reach equilibrium, the price needs to fall below $1.50 to a point where quantity demanded equals quantity supplied. As the price falls, the quantity supplied will also decrease as producers become less willing to sell at lower prices, while the quantity demanded will increase as consumers become more willing to buy at lower prices. Therefore, both quantities will move towards each other until they meet at the equilibrium price and quantity.

​ In Exhibit 3-15, If the Market Price of Good X

In Exhibit 3-15, If the Market Price of Good X