If aggregate quantity demanded exceeds aggregate quantity supplied, we can expect an unplanned
A. depletion of inventories, causing firms to raise prices.
B. depletion of inventories, causing firms to lower prices.
C. accumulation of inventories, causing firms to raise prices.
D. accumulation of inventories, causing firms to lower prices.
Answer: A
You might also like to view...
Michael Potter argued that ____ led to firms earning economic profit over extended periods of time
A) the ease of substitution B) market power C) the extent of consumer power D) degree of competition from foreign tariffs
What is the most likely effect of the development of DVD players and Internet streaming on the movie theater industry?
A. Movie theater tickets become an inferior good B. Increased price elasticity of demand for movie theater tickets C. Decreased costs of producing movies D. Increased demand for movie theater tickets