Question

demand exceeds supply, which is the most likely effect?
options:

• price decreases
• buyers find other products to buy
• producers reduce supply
• price increases

Explanation:

In a market with a shortage (demand > supply), the imbalance creates upward pressure on prices. Producers are incentivized to raise prices as consumers compete for limited goods, moving toward equilibrium. Other options: price decreasing would worsen shortage, buyers switching or producers reducing supply are less direct immediate effects of a shortage - price increase is the typical market response to excess demand.

Answer:

Price Increases