If the supply and demand curves cross at a quantity of 100, then the price necessary to get firms to sell more than that will have to be _______ equilibrium.

Question

Quizplus · Accepted Answer

If the supply and demand curves cross at a quantity of 100, it means that the market is in equilibrium at this point, and both buyers and sellers are satisfied with the price and quantity traded. However, if firms want to sell more than 100, they will have to increase their production, which leads to an increase in their costs. Therefore, they will only be willing to do so if they can sell the additional units at a higher price. This means that the price necessary to get firms to sell more than 100 will have to be above the equilibrium price. If the price is below the equilibrium price, there will be excess demand, and firms will not be incentivized to increase their production. Hence, the correct answer is A) above.

If the Supply and Demand Curves Cross at a Quantity