Which of the following is correct?
i.A surplus puts downward pressure on the price of a good.
ii.A shortage puts upward pressure on the price of a good.
iii.There is no surplus or shortage at equilibrium.
A) i and ii
B) i and iii
C) ii and iii
D) i, ii, and iii
E) only iii

Question

Quizplus · Accepted Answer

All three statements are correct. A surplus, where supply exceeds demand, tends to lower prices. A shortage, where demand exceeds supply, tends to increase prices. At equilibrium, supply equals demand, so there is neither a surplus nor a shortage.

Which of the Following Is Correct