Question

Look at the graph. The retailer decreased the price of green glass ornaments to $10. Which of these would occur?


A. A new equilibrium point, because the demand would decrease
B. A shortage, because the price is lower than equilibrium price
C. A surplus, because the price is lower than equilibrium price
D. Selling more ornaments, because reducing the price would increase supply
(Graph is down below)

Answer 1

In general, falling prices create less incentive to produce and more incentive to buy. Where does that leave us?

Answer 2

Selling more because the price in lowered?

Answer 3

...and producing less. We call this a shortage.

Answer 4

Oh! Ok thank you