Economics 0455 · IGCSE · Price determination

Price determination — practice question

The diagram illustrates supply and demand for a product. Suppliers have chosen to make $10\,000$ units and set a price of $6. What will this decision lead to in the short run?

  • AA stable equilibrium price will be achieved.
  • BSuppliers will be left with unsold stock.
  • CThe equilibrium market price will increase.
  • DThere will be excess demand at the price of $6.

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