Question

How does price reacts to situations of surplus and shortage to bring the equilibrium to its optimum level?

Answer 1

Hlo_ here's Ur Answer ⬇️

Once you raise the price of your product, your product's quantity demanded will drop until equilibrium is reached. Therefore, shortage drives price up. If a surplus exist, price must fall in order to entice additional quantity demanded and reduce quantity supplied until the surplus is eliminated

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