What happens if the price of a product is below the equilibrium price?

Question

Quizplus · Accepted Answer

If the price of a product is below the equilibrium price, it means that the producers are selling the product at a lower price than the market equilibrium price. In this situation, there will be an excess demand for the product as more buyers will want to buy the product at a lower price. This excess demand will create a shortage of the product, and the producers may have to increase the price to avoid the shortage. Therefore, the correct answer is C.

What Happens If the Price of a Product Is Below