Figure 4-E
-If the soccer ball market is in equilibrium at a price of $22 per ball, an increase in the supply of soccer balls will cause a shortage at that price.

Question

Figure 4-E 
-If the soccer ball market is in equilibrium at a price of $22 per ball, an increase in the supply of soccer balls will cause a shortage at that price.

Quizplus · Accepted Answer

An increase in supply will shift the supply curve to the right, causing the equilibrium price to decrease. Therefore, there will not be a shortage at the original price of $22 per ball. Instead, there will be a surplus of soccer balls, which may lead to a decrease in price to reach a new equilibrium.

Figure 4-E -If the Soccer Ball Market Is in Equilibrium at a Equilibrium