When we say that a price in a competitive market is "too low to clear the market," we usually mean that:
A)the quantity supplied exceeds the quantity demanded at that price, so there is too much competition among producers to try to get rid of that supply.
B)consumers are not willing to buy enough at that price.
C)producers are leaving the industry.
D)the quantity demanded exceeds the quantity supplied at that price.
E)no producer can cover costs of production at that price.

Question

Quizplus · Accepted Answer

When a price is "too low to clear the market," it means that the demand for the product at that price is higher than the supply. This situation leads to a shortage, as there are more consumers wanting to buy the product than there are products available at that low price.

When We Say That a Price in a Competitive Market