If the Price of a Good Increases and Is Above

question 24

Multiple Choice

If the price of a good increases and is above the equilibrium price, then:

• A) suppliers' inventories will build up, they will reduce output, and lower prices.
• B) demand will exceed supply and there will be a shortage in the market.
• C) the demand curve will shift to the left until equilibrium is established at the new higher prices.
• D) the supply curve will shift to the right until equilibrium is established at the new higher price.
• E) consumers will bid down the good's price, but there will be no reduction in output.

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