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 statements 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 statements 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

When there is a shortage, the price tends to increase. As the price increases, the quantity demanded decreases and the quantity supplied increases until the market reaches equilibrium, which is at $25 in this scenario.

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