Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound.What takes place?
A) There is a shortage, so the price falls and quantity demanded increases.
B) There is a surplus, so the price falls and quantity demanded increases.
C) There is a shortage, so the price rises and quantity demanded decreases.
D) There is a shortage, so the price rises and quantity demanded increases.
E) There is a shortage, so the price falls and quantity demanded decreases.

Question

Quizplus · Accepted Answer

When the current price is below the equilibrium price, it means that the quantity demanded exceeds the quantity supplied, leading to a shortage. In response to a shortage, prices typically rise to reach equilibrium, and as prices rise, the quantity demanded decreases.

Suppose the Current Price of a Pound of Steak Is