Which of the following predictions is not made bythe supply and demand model?O a. If there is no excess demand or excesssupply, the market will be in equilibrium.O b. A market which is out of equilibrium willalways move rapidly to the equilibrium,C. If there is excess demand, the price will rise.O d. If there is excess supply, the price will fall.

Option b is the correct answer b .market which is out of equilibrium will always move…

Answered: Which of the following predictions is…

Business

Economics

Which of the following predictions is not made by the supply and demand model?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 8PA

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Concept explainers

Equilibrium Price and Quantity

Equilibrium refers to a state of balance that comes about because there is equality in all forces.

Question

Which of the following predictions is not made by
the supply and demand model?
O a. If there is no excess demand or excess
supply, the market will be in equilibrium.
O b. A market which is out of equilibrium will
always move rapidly to the equilibrium,
C. If there is excess demand, the price will rise.
O d. If there is excess supply, the price will fall.

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