If the Price Is Below the Equilibrium Price

question 43

Multiple Choice

If the price is below the equilibrium price,

• A) there is a surplus.
• B) there is a shortage.
• C) the supply curve will shift rightward.
• D) the supply curve will shift leftward.
• E) the demand curve will shift leftward.

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Definitions:

Tying

A sales practice where a seller requires the purchase of a second product or service together with the first.

Price Regulation

Price regulation involves the imposition of controls by a government or regulatory body on the amount charged for goods and services, often to protect consumers.

Lifesaving Drug

A medication that can prevent death in critical health situations.

Vertical Integration

Refers to the common ownership of two firms in separate stages of the vertical supply chain that connects raw materials to finished goods.