Which of the following occurs when a shortage occurs in the market for a good?
A) Quantity demanded exceeds quantity supplied and the market mechanism pushes the price up, which in turn encourages more production and less consumption.
B) Quantity supplied exceeds quantity demanded and the price falls, which encourages more production and less consumption.
C) Quantity demanded exceeds quantity supplied and the market mechanism pushes the price down, which encourages more production and less consumption.
D) Quantity supplied exceeds quantity demanded and the price rises, which encourages more production and less consumption.

Question

Quizplus · Accepted Answer

When there is a shortage, the quantity demanded exceeds the quantity supplied. This typically leads to an increase in price, which encourages producers to supply more and consumers to purchase less, moving the market towards equilibrium.

Which of the Following Occurs When a Shortage Occurs in the Market