The following question are based on the following graph showing the market for corn:

-If the quantity supplied were less than the quantity demanded at a particular price,the equilibrium price would be achieved by

Question

The following question are based on the following graph showing the market for corn:
 
-If the quantity supplied were less than the quantity demanded at a particular price,the equilibrium price would be achieved by

Quizplus · Accepted Answer

If the quantity supplied is less than the quantity demanded at a particular price, there is excess demand or a shortage in the market. In order to reach equilibrium, the price must increase, which will induce firms to produce more and also decrease the quantity demanded as consumers will be less willing to purchase at the higher price. As a result, the quantity supplied and quantity demanded will eventually be equal at the new higher price, achieving equilibrium. Therefore, the correct answer is C, an increase in the price that increases the quantity supplied and decreases the quantity demanded.

The Following Question Are Based on the Following Graph Showing