The Economics of Supply and Demand

Answer choices:

a. sellers will not offer products when it is no longer profitable.

b. the demand for the item will decrease because more people will buy the lower priced substitute.

c. a surplus will occur in the market

d. the price will increase due to the shortage in the marketplace.

e. price will decrease in order to get rid of the excess inventory.

f. equilibrium

g. the quantity demanded will increase as the price decreases.

h. a shortage will occur in the market.

1. What doe the law of demand tells us about the relationship between the quantity demanded and price?

2. Why does the quantity supplied decrease as the selling price decreases?

3. What happens in a market when the price is set too low?

4. What happens in a market when the price is set too high?

5. What is it called whenever there is no shortage or surplus in the market?

6. What happens to the demand for products whenever the price of a substitute item decreases?

7. What happens to the equilibrium price for an item whenever demand decreases?

8. What happens to the equilibrium price for an item whenever demand increases?