-If the market price falls from P₀ to P₁ in the above figure, then
A)a new equilibrium quantity is established.
B)there is a shortage equal to the distance EF.
C)there will be a further tendency for price to fall.
D)there is a surplus of goods on the market equal to the distance Q₁, Q₂.

Question

-If the market price falls from P₀ to P₁ in the above figure, then
A)a new equilibrium quantity is established. 
B)there is a shortage equal to the distance EF. 
C)there will be a further tendency for price to fall. 
D)there is a surplus of goods on the market equal to the distance Q₁, Q₂.

Quizplus · Accepted Answer

When the market price falls from P₀ to P₁, the quantity demanded exceeds the quantity supplied, creating a shortage equal to the distance EF.

-If the Market Price Falls from P₀ to P₁ in the Above