If the price of a good is below the equilibrium price,
A) suppliers will find inventories building; they will cut output and raise prices.
B) suppliers will find inventories being depleted. They will increase production and raise prices.
C) the demand curve will shift down until an equilibrium is established at the existing price.
D) the supply curve will shift up until an equilibrium is established at the existing price.

Question

Quizplus · Accepted Answer

If the price of a good is below the equilibrium price, suppliers will find inventories being depleted. They will increase production and raise prices in order to meet the demand and eventually establish a new equilibrium at the higher price.

If the Price of a Good Is Below the Equilibrium