When the Price of a Resource Is Set Below Equilibrium

question 51

Multiple Choice

When the price of a resource is set below equilibrium,

• A) excess demand for the resource will occur.
• B) excess supply of the resource will result.
• C) the supply of the resource will be inelastic.
• D) the demand for the resource will be inelastic.

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Definitions:

Cane Fiber

Fiber derived from the sugarcane plant, used in a variety of applications, including the production of paper and as a raw material in the textile industry.

Molasses

A thick, dark syrup produced during the refining of sugar or from the fermentation of starch, used as a sweetener or in alcohol production.

Intermediate Products

Goods that are produced by one business for use in further production processes by another business.

Sugar Cane

A tropical grass plant used primarily for its sucrose content, from which sugar is extracted.