If actual market price is below the equilibrium price, a ____ exists and there is a tendency for the market price to ____.
Added by Shane F.
Step 1
This means that there is an excess supply of the good or service. Show more…
Show all steps
Your feedback will help us improve your experience
Andrew Davis and 99 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
If the price is below the equilibrium level, there is a _____________and prices will _____________. Hint: When it doubt draw it out! surplus; decrease surplus; increase shortage; increase excess demand; decrease
Andrew D.
What happens in a market if the current price is above the equilibrium price? What happens if the current price is below the equilibrium price?
Where Prices Come From: The Interaction of Demand and Supply
Market Equilibrium: Putting Demand and Supply Together
If both the supply of and the demand for a good decrease simultaneously, but the decrease in demand is greater than the decrease in supply, then the equilibrium price _____ and equilibrium output _____.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD