If the price of a good is below the equilibrium price,then
A) the government needs to set a higher price.
B) firms,dissatisfied with growing inventories,will raise the price.
C) consumers,wanting to ensure they acquire the good,will bid the price higher.
D) the government needs to set a lower price.
E) firms,dissatisfied with growing inventories,will lower the pricE.

Question

Quizplus · Accepted Answer

If the price of a good is below the equilibrium price, it means that there is excess demand for the good. As a result, consumers will be willing to pay a higher price to ensure they acquire the good, which will bid the price higher until it reaches the equilibrium price. Therefore, option C is the correct choice. None of the other options are accurate as price controls by the government or firms adjusting their prices will not necessarily lead to the market reaching equilibrium.

If the Price of a Good Is Below the Equilibrium