In the widget market, currently 100 widgets are being sold. At this quantity, consumers are willing to pay $5, and sellers are willing to accept $2. What must be true in the widget market?

Question

Quizplus · Accepted Answer

Since consumers are willing to pay $5 for the widgets but sellers are willing to accept only $2, it indicates that demand exceeds supply at the price of $2. This situation creates a shortage, and to clear the market, the price must rise above $2 to reach equilibrium.

In the Widget Market, Currently 100 Widgets Are Being Sold