-When a shortage exists in a market
A) the market clearing price is above equilibrium and market forces will cause the price to fall.
B) the quantity demanded is less than the quantity supplied at the existing price.
C) the current price is below the market clearing price and the price will rise.
D) the quantity supplied is greater than the quantity demanded at the current price.

Question

-When a shortage exists in a market
A) the market clearing price is above equilibrium and market forces will cause the price to fall. 
B) the quantity demanded is less than the quantity supplied at the existing price. 
C) the current price is below the market clearing price and the price will rise. 
D) the quantity supplied is greater than the quantity demanded at the current price.

Quizplus · Accepted Answer

When a shortage exists, it means that the demand for a product exceeds the supply at the current price. This situation indicates that the current price is below the equilibrium or market clearing price, leading to upward pressure on prices as consumers compete for the limited supply. Market forces will cause the price to rise until equilibrium is reached, where quantity demanded equals quantity supplied.

-When a Shortage Exists in a Market