Figure 3-6
-Refer to Figure 3-6.The figure above represents the market for coffee grinders.Assume that the market price is $21.Which of the following statement is true?
A)There is a shortage that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25.
B)There is a shortage that will cause the price to increase; quantity supplied will then decrease and quantity demanded will increase until the price equals $25.
C)There will be a shortage that will cause the price to increase; demand will then decrease and supply will increase until the price equals $25.
D)There is a shortage that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25.

Question

Figure 3-6 
-Refer to Figure 3-6.The figure above represents the market for coffee grinders.Assume that the market price is $21.Which of the following statement is true?
A)There is a shortage that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25. 
B)There is a shortage that will cause the price to increase; quantity supplied will then decrease and quantity demanded will increase until the price equals $25. 
C)There will be a shortage that will cause the price to increase; demand will then decrease and supply will increase until the price equals $25. 
D)There is a shortage that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25.

Quizplus · Accepted Answer

In a market, when the current price is below the equilibrium price, there is a shortage because the quantity demanded exceeds the quantity supplied. This shortage puts upward pressure on the price. As the price increases, the quantity demanded will decrease, and the quantity supplied will increase until the market reaches equilibrium, where supply equals demand. This is consistent with choice A's description.

Figure 3-6 -Refer to Figure 3-6.The Figure Above Represents the Market for the Market