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A decrease in supply will cause an?
increase in equilibrium price and a decrease in equilibrium quantity, which leads to a shortage at the original price.
What do economists mean when they say that price floors and ceilings stifle the rationing function of prices and distort resource allocation?
When economist says price floors means above equilibrium and leads to undermanned surplus. When they say price ceilings it means price below equilibrium which leads to unsupplied shortage.
What causes a shortage of goods price ceiling or price floor Which causes a surplus?
if, at a current price there is a shortage of a good
How does a surplus or a shortage of a good or service affect the market price?
A surplus or a shortage of a good or service affects the market price directly. When there is a surplus, the prices goes down and when there is a shortage the price increases due to the demand levels.
What happens to price when a shortage exists?
Consumers bid up the price.
A decrease in supply will cause an?
increase in equilibrium price and a decrease in equilibrium quantity, which leads to a shortage at the original price.
What do economists mean when they say that price floors and ceilings stifle the rationing function of prices and distort resource allocation?
When economist says price floors means above equilibrium and leads to undermanned surplus. When they say price ceilings it means price below equilibrium which leads to unsupplied shortage.
What causes a shortage of a good - a price ceiling or a price floor?
if, at a current price there is a shortage of a good
What causes a shortage of goods price ceiling or price floor Which causes a surplus?
if, at a current price there is a shortage of a good
How does a surplus or a shortage of a good or service affect the market price?
A surplus or a shortage of a good or service affects the market price directly. When there is a surplus, the prices goes down and when there is a shortage the price increases due to the demand levels.
Can a powerful earthquake leads to shortage of drinking water?
when the earth shakes
What happens to price when a shortage exists?
Consumers bid up the price.
Binding price floor in a market sets price?
below equilibrium price and causes a shortage
What is one effect of price ceiling?
shortage of supply
What is one effect of a price ceiling?
A shortage of supply
How did the gas shortage lead to changes in the American auto industry?
Gas went up in price because of the shortage.
Market clearing price?
The price that exists when a market is clear of shortage and surplus, or is in equilibrium.
