Question

7. The price plays an important role in the market - How can we relate the price with the demand for a product and supply of the good.​

Answer 1

Answer:

At any price below P, the quantity demanded is greater than the quantity supplied. In such a situation, consumers would clamour for a product that producers would not be willing to supply; a shortage would exist.... The end result is a rise in price, to P, where supply and demand are in balance.

Explanation: