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Suppose the market for hamburgers is unregulated. That is, hamburger prices are free to adjust based on the forces of supply and demand. If a shortage exists in the hamburger market, then the current price must be than the equilibrium price. For the market to reach equilibrium, you would expect_________________

Respuesta :

Answer:

If shortage exists, current price must be lower than equilibrium price.

For market to reach equilibrium : Excess demand will raise price & expanded supply, contracted supply will restore equilibrium.  

Explanation:

Market is at equilibrium where : Market Demand = Supply

Excess Demand i.e Quantity Demanded > Quantity Supplied [Shortage] arises at price level lower than equilibrium price. Such because, demand & supply are inversely & directly related to price respectively.

Shortage creates competition among buyers, which increases the price level. Raised prices lead to decrease in quantity demanded, increase in quantity supplied. This will happen till quantity demanded = quantity supplied again & the equilibrium is restored.

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