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Asked by Sarah Gittins on May 14, 2024

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Surpluses drive market prices up; shortages drive them down.

Surpluses

Situations in which the quantity of a good or service supplied exceeds the quantity demanded at the current price.

Market Prices

Refers to the specific values at which commodities, securities, or services are traded in a competitive marketplace.

Shortages

Occur when the demand for a good or service exceeds its supply in a given market, often leading to price increases.

  • Acknowledge the importance of price levels in markets as cues that harmonize the decisions made by purchasers and sellers.
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LC
Lynde CrevistonMay 20, 2024
Final Answer :
False
Explanation :
Surpluses drive market prices down because sellers have more goods or services than buyers want or are able to purchase at the current price, leading to a decrease in prices to stimulate demand. Shortages drive market prices up because the demand for a good or service exceeds the supply, leading sellers to increase prices.

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