Asked by Sewisha Thabo Lehong on May 09, 2024
Verified
Suppose the equilibrium price of good X is $25 and the equilibrium quantity is 124 units.If the price of good X is $2:
A) there will be excess demand for good X.
B) there will be an excess supply of good X.
C) the market will clear.
D) the quantity demanded of good X will be less than 124 units.
Excess Demand
A situation where the quantity demanded of a good or service exceeds the quantity supplied at the current price, leading to upward pressure on prices.
Good X
A term used to represent a hypothetical or specific good in economic models and discussions.
- Learn the association between price adjustments and the level of demand or supply for goods.
Verified Answer
RA
Racer AkashMay 16, 2024
Final Answer :
A
Explanation :
When the price of a good is below its equilibrium price, the quantity demanded exceeds the quantity supplied, leading to excess demand.
Learning Objectives
- Learn the association between price adjustments and the level of demand or supply for goods.