In a free market the price will increase if there is excess demand and decrease if there is excess supply to bring about equilibrium.

Question

Quizplus · Accepted Answer

In a free market, prices adjust due to the forces of supply and demand. If there is excess demand (more buyers than sellers at a given price), prices will rise to reduce demand and increase supply until equilibrium is reached. Conversely, if there is excess supply (more sellers than buyers at a given price), prices will fall to increase demand and reduce supply until equilibrium is achieved.

In a Free Market the Price Will Increase If There