If a market begins in equilibrium and then the demand curve shifts leftward,a
A) shortage is created, which is eliminated by a fall in price.
B) shortage is created, which is eliminated by a rise in price.
C) surplus is created, which is eliminated by a fall in price.
D) surplus is created, which is eliminated by a rise in price.
E) surplus is created, which is eliminated by the supply curve shifting leftward.

Question

Quizplus · Accepted Answer

When the demand curve shifts leftward, it means there is less demand for the product at each price point. This creates a surplus because the quantity supplied exceeds the quantity demanded at the original equilibrium price. The surplus is eliminated by a fall in price, which makes the product more attractive to buyers, thereby increasing the quantity demanded and decreasing the quantity supplied until a new equilibrium is reached.

If a Market Begins in Equilibrium and Then the Demand