Question

In relation to normal price, how does market price generally behave over time?

Options

• It always stays exactly equal to normal price

• It permanently remains above normal price

• It permanently remains below normal price

• It fluctuates above and below normal price like waves around an average level

Answer 1

It fluctuates above and below normal price like waves around an average level

Explanation:

Market price moves up and down due to short‑run changes in demand and supply, so it often lies above or below the normal price. Normal price acts like an average level around which these short‑run movements occur.