When the Price Is Less Than the Equilibrium Price

question 235

Multiple Choice

When the price is less than the equilibrium price

• A) there will be a shortage.
• B) some consumers will be willing to pay a price higher than the prevailing price.
• C) the price will be forced higher.
• D) All of the above answers are correct.

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Definitions:

Tariffs

Taxes imposed on imported goods and services, which can affect trade relations and economic policies between countries.

Transnational Corporations

Large companies that operate and have assets in more than one country, functioning with a global perspective.

Local Firms

Businesses that operate within a specific geographic area or community, typically offering products or services to the local population.

Political Risks

The possibility of losses to a business due to changes in a country's political environment or policies.