If producers incorrectly set the price of their product too low:

Question

Quizplus · Accepted Answer

When producers set the price of their product too low, the demand for the product will increase, leading to a shortage, i.e., the quantity demanded will exceed the quantity supplied. Customers will be willing to buy more of the product at the lower price, and producers won't be willing to supply the amount that customers want at the given price. Therefore, setting the price lower will lead to a shortage.

If Producers Incorrectly Set the Price of Their Product Too