Respuesta :
The answer is: The price of a product falls below the equilibrium price.
According to the laws of supply, the amount of supply would decrease as the price of product fall.
This happen because the producers would obtain lesser amount of profit if they choose to sell the products with falling price. Since there would be less and less producers who willing do supply it, it eventually lead to a shortage.
The shortage is a situation in which the equilibrium price is changed whether due to supply and demand of the good. When the demand for the good increases and the good’s supply will not change, this is the situation of shortage. When the good’s supply decreases and the demand will not change, this is the situation of shortage.
Further Explanation:
Law of supply:
According to the Law of supply, when the price of the goods increases, the quantity supplied of the goods will increase and when the price of the goods decreases, the quantity supplied of goods will decrease. The supply curve is upward sloping since the quantity supplied and prices are directly proportional.
Law of Demand:
According to this law 'when the price of the goods increases, quantity demanded will fall and when the price of the goods decreases, the goods of good demanded will increase while other things remain constant.
When the demand for the product is increased and the supply of the product is the same, there is a shortage of the product in the market.
When the supply of the product is decreased and the demand for the product is the same, there is a shortage of the product in the market.
The equilibrium price is changed when there is a shortage or excess of demand.
Learn more:
1. Learn more about demand and type of goods
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2. Learn more about the effect on demand
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3. Learn more about the demand curve
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Answer details:
Grade: Middle School
Subject: Economics
Chapter: Law of supply and demand
Keywords:the law of supply, the law of demand, shortage, demand increases, supply decrease, equilibrium price, the number of goods demanded, will not change, excess demand.
