Table 2.11 depicts the market for mushrooms (in thousands of kilograms per month).

-What is the effect of a shortage?
A)It will cause a decrease in the price,leading to an increase in the quantity supplied and a decrease in the quantity demanded.
B)It will cause a decrease in the price,leading to a decrease in the quantity supplied and an increase in the quantity demanded.
C)It will cause an increase in the price,leading to an increase in the quantity supplied and a decrease in the quantity demanded.
D)It will cause an increase in the price,leading to a decrease in the quantity supplied and an increase in the quantity demanded.

Question

Table 2.11 depicts the market for mushrooms (in thousands of kilograms per month).
 
-What is the effect of a shortage?
A)It will cause a decrease in the price,leading to an increase in the quantity supplied and a decrease in the quantity demanded. 
B)It will cause a decrease in the price,leading to a decrease in the quantity supplied and an increase in the quantity demanded. 
C)It will cause an increase in the price,leading to an increase in the quantity supplied and a decrease in the quantity demanded. 
D)It will cause an increase in the price,leading to a decrease in the quantity supplied and an increase in the quantity demanded.

Quizplus · Accepted Answer

A shortage occurs when demand exceeds supply at the current price, leading to an increase in price. This higher price encourages producers to supply more (increase in quantity supplied) and consumers to demand less (decrease in quantity demanded), helping to eliminate the shortage.

Table 211 Depicts the Market for Mushrooms (In Thousands of Kilograms