Question

Imagine that in the market for milk there is currently a shortage. How does the market...

Imagine that in the market for milk there is currently a shortage. How does the market return to equilibrium? Place the following steps in their correct order.

a. Quantity demanded and quantity supplied are now equal.

b. Prices will begin to rise as suppliers increase price and consumers offer more for the milk.


c. To begin with, quantity demanded is greater than quantity supplied.

d. Suppliers will not have enough milk and some consumers who want the product at the current price will be unable to buy it.

e. Increasing Prices lead to a decrease in quantity demanded and an increase in quantity supplied.

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Answer #1

c. To begin with, quantity demanded is greater than quantity supplied. (Shortage)

d. Suppliers will not have enough milk and some consumers who want the product at the current price will be unable to buy it.

b. Prices will begin to rise as suppliers increase price and consumers offer more for the milk.

e. Increasing Prices lead to a decrease in quantity demanded and an increase in quantity supplied.

a. Quantity demanded and quantity supplied are now equal. (Equilibrium)

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