If the price is below the equilibrium price in the market for apples,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:
A) will be greater than if price were at equilibrium.
B) will be less than if price were at equilibrium.
C) will be the same as if price were at equilibrium.
D) may be different than if price were at equilibrium,but we cannot determine this without more information.

Question

Quizplus · Accepted Answer

When the price is below the equilibrium price, there is excess demand for apples. As a result, suppliers are not willing to sell as much as consumers want to buy, resulting in a shortage. This shortage causes the price to rise, increasing total surplus. Therefore, if the price is below equilibrium, total surplus will be less than if the price were at equilibrium.

If the Price Is Below the Equilibrium Price in the Market