Which of the following statements is TRUE about the equilibrium price, P, and equilibrium quantity, Q?
A) If the price is set at P, then more than Q will be sold.
B) If the price is set above P, then less than Q will be sold.
C) If the price is set below P, then more than Q will be sold.
D) Both b and c are true.

Question

Quizplus · Accepted Answer

In an equilibrium, the price and quantity demanded equal the price and quantity supplied. If the price is set above the equilibrium price (option B), there will be excess supply, and quantity demanded will be less than Q. If the price is set below the equilibrium price (option C), there will be excess demand and quantity demanded will be more than Q. Therefore, options B and C are both true.

Which of the Following Statements Is TRUE About the Equilibrium