If the Price of Tea Is Below Its Equilibrium Level

question 12

Multiple Choice

If the price of tea is below its equilibrium level, then:

• A) the demand for tea will decrease.
• B) the market for tea has cleared.
• C) sellers will be stuck with unsold tea.
• D) there is a shortage of tea.

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Definitions:

Firm's Output

The quantity of goods or services produced by a firm within a given time period.

Short Run

A period in economics where at least one factor of production is fixed and cannot be changed.

Firm's Output

This refers to the quantity of goods or services produced by a firm within a given time period.

Lowest Price

The lowest cost at which a product or service is available in the marketplace.