Read the two statements and choose the correct option.
I. As the price falls from above equilibrium, quantity demanded extends and quantity supplied contracts.
II. As the price rises from below equilibrium, demand curve shifts to the left.

Only ICorrect answerYour answerOnly IICorrect answerYour answerBoth I and IICorrect answerYour answerNeither I nor IICorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

I is true: these movements along the curves close the gap.
II is false: a price change moves buyers along the demand curve; it does not shift it.

Ten questions from Market Equilibrium & Price Controls, at your own pace.

Ten questions from Market Equilibrium & Price Controls, at your own pace.

Read the two statements and choose the correct option.I. As the price falls from above equilibrium, quantity demanded extends and quantity supplied contracts.II. As the price rises from below equilibrium, demand curve shifts to the left.