When the market is out of equilibrium at a price that is too low... O A. price rises, quantity supplied falls, and quantity demanded rises B. price falls, quantity supplied rises, and quantity demanded falls C. price rises, quantity supplied rises, and quantity demanded falls OD. price falls, quantity supplied falls, and quantity demanded rises

Macroeconomics
13th Edition
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter3: Supply And Demand: Theory
Section: Chapter Questions
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When the market is out of equilibrium at a price that is too low...
OA. price rises, quantity supplied falls, and quantity demanded rises
B. price falls, quantity supplied rises, and quantity demanded falls
C. price rises, quantity supplied rises, and quantity demanded falls
OD. price falls, quantity supplied falls, and quantity demanded rises
Transcribed Image Text:When the market is out of equilibrium at a price that is too low... OA. price rises, quantity supplied falls, and quantity demanded rises B. price falls, quantity supplied rises, and quantity demanded falls C. price rises, quantity supplied rises, and quantity demanded falls OD. price falls, quantity supplied falls, and quantity demanded rises
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In a market, optimal level of output and equilibrium price is where quantity demanded equals quantity supplied. If market is out of equilibrium, market price will be above or below the equilibrium price due to which there is a need to move the price up or down to reach the equilibrium.

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