The diagram below shows the market for product B. If the shift of the supply curve from S₁ to S₂ took place, but the price failed to adjust to the new equilibrium, which one of the following would likely be witnessed in the market for product B? Price S₁ Demand P₁ E₁ X E₂ P₂ Q₁ Q₂ Quantity S₂ a) There will be an excess supply in the market b) There will be an excess demand in the market c) The new market price does not need to adjust, as the price can remain constant and the new market will still be in equilibrium d) The price is not a significant factor in determining the market equilibrium.
The diagram below shows the market for product B. If the shift of the supply curve from S₁ to S₂ took place, but the price failed to adjust to the new equilibrium, which one of the following would likely be witnessed in the market for product B? Price S₁ Demand P₁ E₁ X E₂ P₂ Q₁ Q₂ Quantity S₂ a) There will be an excess supply in the market b) There will be an excess demand in the market c) The new market price does not need to adjust, as the price can remain constant and the new market will still be in equilibrium d) The price is not a significant factor in determining the market equilibrium.
Chapter5: Markets In Motion And Price Controls
Section: Chapter Questions
Problem 10P
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Question
Transcribed Image Text:The diagram below shows the market for product B. If the shift of the supply curve from S₁ to
S₂ took place, but the price failed to adjust to the new equilibrium, which one of the following
would likely be witnessed in the market for product B?
Price
S₁
Demand
X
P₁
E₁
E₂
Q₂
Quantity
a
P₂
S₂
a) There will be an excess supply in the market
b) There will be an excess demand in the market
c) The new market price does not need to adjust, as the price can remain constant and
the new market will still be in equilibrium
d) The price is not a significant factor in determining the market equilibrium.
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