Figure 3.4.1
Use the figure below to answer the following questions.

-At price P₁ in Figure 3.4.1

Question

Figure 3.4.1 Use the figure below to answer the following questions. -At price P₁ in Figure 3.4.1

Quizplus · Accepted Answer

At price P₁, the quantity demanded (Q₂) is less than the quantity supplied (Q₄). Therefore, there is a shortage in the amount of Q₄ - Q₂. This will put upward pressure on the price, which will tend to correct the shortage by encouraging suppliers to increase the quantity they are willing to supply and discouraging buyers from demanding as much. Ultimately, the price will rise to the equilibrium level where quantity supplied and quantity demanded are equal.

Figure 3.4.1 Use the Figure Below to Answer the Following Questions