Question

There is a shortage in a market for a product when rev: 05_07_2018 Multiple Choice demand is less than supply. supply is less than demand. quantity demanded is lower than quantity supplied. the current price is lower than the equilibrium price.

Answer 1

Answer: Option (D) is correct.

Explanation:

Correct option: The current price is lower than the equilibrium price.

When the current price is lower than the equilibrium price, this will increase the demand for the product. Consumers wants to buy more quantity of goods at a lower price, as a result demand for the product increases. But the producer of the product wants to sell less, as price is lower than the equilibrium level.

Hence, there is a shortage in a market of product.