In most countries, primary and secondary education is the responsibility of the

If the economy is on the aggregate supply curve but to the right of the aggregate demand curve, which of the following will be the first market force to lead the economy toward an equilibrium?

a. At the current output level, prices will be too low and firms will increase their prices. b. At the current price level, output will be too low, inventories will diminish, and firms will increase their production. c. At the current output level, prices will be too low and firms will lower their prices. d. At the current price level, output will be too high and so prices will drop so that output will drop. e. At the current price level, output will be too high, inventories will pile up and firms will cut back on their production.

Suppose buyers in the used car market are willing to pay $4,000 for a plum (high-quality) used car and $2,000 for a lemon (low-quality) used car. If buyers believe that 50% of the used cars on the market are lemons (low quality), what would they be willing to pay for a used car?

A. $2000 B. $3000 C. $3500 D. $4000