4
practice testMultiple Choice

Practice Test

Question 4 • Economics

If quantity demanded exceeds quantity supplied, what most likely needs to happen to achieve equilibrium?

Answer
A
The demand needs to increase.
B
The price needs to decrease.
C
The supply needs to increase.
D
The price needs to increase.

Explanation

When quantity demanded exceeds quantity supplied, there is a shortage: buyers want more of the good than sellers are offering. The shortage puts upward pressure on the price, which encourages sellers to supply more and buyers to demand less until the quantities match. Therefore, the price needs to increase.

AI-written and checked against the verified answer.

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