Figure 4-5
-Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $3, what changes in the market would result in an economically efficient output?
A) The price would increase, the quantity supplied would decrease, and the quantity demanded would increase.
B) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase.
C) The price would increase, the demand would decrease, and the supply would increase.
D) The price would increase, the quantity demanded would decrease, and the quantity supplied would increase.

Question

Figure 4-5 
-Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $3, what changes in the market would result in an economically efficient output?
A) The price would increase, the quantity supplied would decrease, and the quantity demanded would increase. 
B) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase. 
C) The price would increase, the demand would decrease, and the supply would increase. 
D) The price would increase, the quantity demanded would decrease, and the quantity supplied would increase.

Quizplus · Accepted Answer

In a competitive market, if the price is below equilibrium, the quantity demanded exceeds the quantity supplied, leading to a shortage. To reach an economically efficient output, the price must increase, causing the quantity demanded to decrease and the quantity supplied to increase until equilibrium is reached.

Figure 4-5 -Refer to Figure 4-5. the Figure Above Represents the Market