The price of a good always changes when
A) either a shortage or a surplus occurs.
B) quantity demanded and quantity supplied are constant.
C) there is an increase in demand and an increase in supply.
D) there is a decrease in demand and a decrease in supply.

Question

Quizplus · Accepted Answer

The occurrence of either a shortage or a surplus in the market causes a change in the equilibrium price of the good. A shortage occurs when the quantity demanded exceeds the quantity supplied at the current price, causing an upward pressure on the price. On the other hand, a surplus occurs when the quantity supplied exceeds the quantity demanded at the current price, leading to a downward pressure on the price. Therefore, the price of a good always changes when a shortage or a surplus occurs.

The Price of a Good Always Changes When