Assume,in a competitive market,price is initially below the equilibrium level.We predict that price will:

Name: Assume,in a competitive market,price is initially below the equilibrium level.We predict that price will:
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Question

Quizplus · Accepted Answer

When the price is below the equilibrium level, there is excess demand (shortage), leading to upward pressure on the price. As the price increases, quantity demanded decreases and quantity supplied increases until equilibrium is reached.

Assume,in a Competitive Market,price Is Initially Below the Equilibrium Level