Multiple Choice
Which of the following occurs when a shortage occurs in the market for a good?
A) Quantity demanded exceeds quantity supplied and the market mechanism pushes the price up, which in turn encourages more production and less consumption.
B) Quantity supplied exceeds quantity demanded and the price falls, which encourages more production and less consumption.
C) Quantity demanded exceeds quantity supplied and the market mechanism pushes the price down, which encourages more production and less consumption.
D) Quantity supplied exceeds quantity demanded and the price rises, which encourages more production and less consumption.
Correct Answer:
Verified
Correct Answer:
Verified
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