Surpluses cause prices to fall while shortages cause prices to rise.

Name: Surpluses cause prices to fall while shortages cause prices to rise.
Brand: Quizplus
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Question

​Surpluses cause prices to fall while shortages cause prices to rise.

Quizplus · Accepted Answer

This is a basic principle of supply and demand in economics. When there is an excess supply of a good or service (a surplus), prices tend to fall as suppliers compete to sell their products. Conversely, when there is a shortage of a good or service, prices tend to rise as demand outstrips supply and buyers are willing to pay more to acquire the product.

​Surpluses Cause Prices to Fall While Shortages Cause Prices to Rise

Surpluses Cause Prices to Fall While Shortages Cause Prices to Rise