(Figure: Predicting Market Shifts) Why Is There a Tendency for This

question 278

Multiple Choice

(Figure: Predicting Market Shifts) Why is there a tendency for this market to adjust from a price of P₁ to P₂?

• A) The presence of excess inventories forces firms to cut prices.
• B) The presence of an economic shortage induces firms to offer lower prices.
• C) The government wants to regulate the market.
• D) Insufficient production causes some consumers to offer to pay more for the product.

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Definitions:

Predictions

Statements about what will happen in the future based on current information or trends.

Testable

Capable of being examined and evaluated through experimentation or observation to verify the truth or effectiveness.

Hypothesis

A proposed explanation for a particular set of phenomena.

Refuted

Successfully argued against a statement or theory, proving it to be wrong or false.