Market Equilibrium

A local farmer's market is selling tomatoes at P50 per kilo. However, many sellers are unable to sell all their tomatoes by the end of the day. What does this indicate?

• a.    The market is in equilibrium.

• b. The price is above the equilibrium price, causing a surplus.

• c. The price is below the equilibrium price, causing a shortage.

• d. There are other substitute goods in the market with much higher prices.

A new milk tea shop opens in town and becomes extremely popular, leading to long lines and sold-out supplies every day. What could be happening in the market?

• a. Quantity demanded is greater than quantity supplied, creating a shortage

• b. Quantity supplied is greater than quantity demanded, creating a surplus.

• c. Quantity demanded is equal to quantity supplied, causing a balance in the market.

• d. Market supply is greater than the market demand.

Due to a typhoon, the supply of corn in the province dropped significantly. If demand remains constant, what will happen to the price and quantity of corn?

• a. Price will increase, while the quantity supplied stays the same

• b. Price will stay the same, while the quantity supplied increases

• c. Price will decrease while quantity supplied will increase

• d. Price will increase while quantity supplied will decrease

A newly released phone model experiences low sales because the price is too high. Which of the following will most likely occur?

• a. a shortage

• b. a surplus

• c. a market equilibrium

• d. a low inventory of the product

The government imposed a price ceiling on rice, setting the price below the market price. Which of the following is the most likely outcome?

• a. Consumers will buy less rice

• b. A surplus will occur

• c. A shortage will occur

• d. Producers will sell the same amount of rice

A famous K-drama boosts demand for Korean ramen in local stores. If the supply of ramen remains the same, what will likely happen to the price of ramen and the quantity sold?

• a. Price decreases; quantity decreases

• b. Price increases; quantity increases

• c. Price remains the same; quantity increases

• d. Price increases; quantity remains the same

After a technology upgrade, a local bakery can produce more bread at the same cost. What happens if the demand for bread remains unchanged?

• a. The supply curve shifts to the left; price increases

• b. The supply curve shifts to the right; price decreases

• c. The demand curve shifts to the right; price increases

• d. Quantity supplied decreases

A clothing store offers a big discount, selling items below their regular price. Customers rush in and buy most of the stock. What market conditions does this show?

• a. Market equilibrium

• b. Surplus

• c. Shortage

• d. Demand decrease

A government sets a minimum price for sugar that is above the equilibrium price to help farmers. What may happen in the sugar market?

• a. An increase in demand for sugar

• b. A decrease in the price of sugar

• c. A shortage of sugar

• d. A surplus of sugar

A town experiences a population boom, increasing the demand for housing. Supply is not able to adjust immediately. What could be the immediate effect on the housing market?

• a. Equilibrium price drops

• b. Surplus of houses

• c. Housing price increases

• d. Demand stays the same