Figure 3-4
-Refer to Figure 3-4.If the current market price is $25,the market will achieve equilibrium by
A)a price increase,increasing the supply and decreasing the demand.
B)a price decrease,decreasing the supply and increasing the demand.
C)a price decrease,decreasing the quantity supplied and increasing the quantity demanded.
D)a price increase,increasing the quantity supplied and decreasing the quantity demanded.

Question

Figure 3-4 
-Refer to Figure 3-4.If the current market price is $25,the market will achieve equilibrium by
A)a price increase,increasing the supply and decreasing the demand. 
B)a price decrease,decreasing the supply and increasing the demand. 
C)a price decrease,decreasing the quantity supplied and increasing the quantity demanded. 
D)a price increase,increasing the quantity supplied and decreasing the quantity demanded.

Quizplus · Accepted Answer

At the current market price of $25, the quantity supplied is greater than the quantity demanded. This creates a surplus in the market, which will put downward pressure on the price until the quantity supplied decreases and the quantity demanded increases to reach equilibrium. Therefore, the market will achieve equilibrium by a price decrease, decreasing the quantity supplied and increasing the quantity demanded. This is represented by movement along the supply and demand curves, rather than shifts in the curves themselves. Choice A and D are incorrect because they suggest that the equilibrium price will increase, which is not true based on the graph. Choice B is incorrect because it suggests that the demand curve will shift, which is not true based on the given information.

Figure 3-4 -Refer to Figure 3-4.If the Current Market Price Is $25,the