alleryStart learning →In an unfettered market, excess demand (a shortage) leads to what?
APrice rises follow
BPrice cuts follow
COutput restrictions
DAn unchanged price
Answer & Solution
Correct answer: A. Price rises follow
Buyers compete for scarce goods and bid prices up until quantity demanded falls to match supply.
Keep practising Supply
Browse all Supply questions for CA Foundation, or explore more Business Economics topics.
Related questions
Some heterodox economists say supply for mass-produced goods slopes how?Why do perishable farm goods reach markets in large quantities even at low prices just aftSupply is the amount sellers are what, at given prices?The supply of labour is time people will work as a function of what?In a dynamic equilibrium, which stays unchanging?How does a monopolistic firm prop up prices at its equilibrium?Economists caution against attaching what to an equilibrium price?The stability property says equilibrium is the outcome of what?