Answered: If the producers of a good demand a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

PLEASE ITS MICRO ECONOMICS!! HELP ME ANSER THOSE TWO MULTIPLE CHOICES! If the producers of a good demand a price that is too high (higher than the equilibrium price), this generates a) a shortage of the good followed by a gradual decrease in the price of the good. b) a surplus of the property followed by a gradual decrease in the price of the property. C) a surplus of the property followed by a gradual increase in the price of the property. d a shortage of the good followed by a gradual increase in the price of the good. If the producers of a good demand a price that is too high (higher than the equilibrium price), this generates a) a shortage of the good followed by a gradual decrease in the price of the good. a surplus of the property followed by a gradual decrease in the price of the property. a surplus of the property followed by a gradual increase in the price of the property. d) a shortage of the good followed by a gradual increase in the price of the good.

Expert Solution

Step 1: Understand the Concept of Equilibrium Price

Equilibrium price refers to the price level at which the quantity supplied by producers equals the quantity demanded by consumers in a market.

At this price, there's neither a surplus nor a shortage of the product.

When prices are set above or below this equilibrium, imbalances in the market can occur, leading to surpluses or shortages.

As market forces act, these imbalances can trigger changes in prices as producers and consumers adjust their behaviors.

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