What happens if there is a shortage of a good at the current price?

Question

Quizplus · Accepted Answer

If there is a shortage of a good at the current price, it means that quantity demanded exceeds quantity supplied. This suggests that buyers are willing to buy more of the good at the current price, but there is not enough supply to meet the demand. This creates a situation where sellers can raise the price to a level where quantity supplied matches quantity demanded, which is the equilibrium price. Therefore, the current price must be below the equilibrium price, which makes option C the correct choice.

What Happens If There Is a Shortage of a Good