If the Price of a Good Is Below the Equilibrium

question 175

Multiple Choice

If the price of a good is below the equilibrium price,

• A) suppliers will find inventories building; they will cut output and raise prices.
• B) suppliers will find inventories being depleted. They will increase production and raise prices.
• C) the demand curve will shift down until an equilibrium is established at the existing price.
• D) the supply curve will shift up until an equilibrium is established at the existing price.

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Definitions:

Hawthorne Studies

A series of experiments conducted in the 1920s and 1930s that highlighted the impact of work conditions, social factors, and employee attitudes on productivity.

Social Factors

Aspects of society and culture that influence individuals' behaviors, actions, and preferences.

Productivity Increase

A rise in the output of goods or services relative to the input of resources such as time or labor.

Performance Excellence

The achievement of outstanding performance in operations, customer satisfaction, and financial outcomes.