Which of the following would result if the price level were below the equilibrium level?
A)Aggregate demand would increase.
B)Aggregate supply would decrease.
C)Consumers would bid prices up by competing for goods currently in shortage.
D)Shortages would force sellers to lower prices in order to increase aggregate quantity demandeD.Shortages would develop across the economy,which would cause prices to rise and thus encourage more production.

Question

Quizplus · Accepted Answer

If the price level is below the equilibrium level, it implies that there is excess supply in the market, which would lead to a shortage of demand by consumers. In this situation, consumers would bid prices up by competing for goods currently in shortage, and prices would rise to reach equilibrium.

Which of the Following Would Result If the Price Level