Any price below the equilibrium price will lead to
...Any price below the equilibrium price will lead to
Increase in supply
Excess demand
Equality of demand and supply
Decreases in demand
Correct answer is B
Any price below the equilibrium price will lead to excess demand with decrease in supply. This is so because, people generally buy more of a commodity when the price is low while suppliers will want to supply more when the price is high. Hence, for a price set below equilibrium, suppliers will cut back on producing more of that commodity while demand will be high.
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