Question

of prices affect how much of a good producers are willing to sell? Actual prices, not expectations of prices, affect supply O If producers expect prices to fall in the future, they supply less at every price. If producers expect prices to rise in the future, they supply less at every price. level. O the quantity supplied exceeds the quantity demanded the supply curve shifts to the left. the supply curve shifts to the right is true? There is excess demand O There is excess supply O There is scarcity at every price, the

Answer 1

1). The expectations of the producer will affect the quantity produced in the market, if the producer expect the price is going to fall in the future so he will produce more now to earn the profit. At the higher prices higher profits are earned and vice versa. And if the producer expect the prices to rise in the future so they supply less to the market today and so they can increase the production at a higher prices in the future.

Ans: If the producers expect the prices to rise in the future , they supply less at every price.

2). If the price of a product is above the equilibrium, the quantity supplied will be greater than the quantity demanded and that is excess supply , this occurs because at high prices the producers supply more to the market.

Ans: Quantity supplied exceeds the quantity demanded.

3). In the given graph the price is above the equilibrium so there should be an excess supply.

Ans: Excess supply.

4). If the demand increases at every price level that is a rightward shift of the demand curve and there will be an increase in the equilibrium price.

Ans: Rise.