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When the actual price of a commodity is less than the equilibrium price, then equilibrium price ______ -

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Question

When the actual price of a commodity is less than the equilibrium price, then equilibrium price ______

Options

  • Starts rising

  • Starts falling

  • Remains constant

  • First falls, then rises

MCQ
Fill in the Blanks

Solution

Starts rising

Explanation:

Demand rises when the real price of a commodity is lower than the equilibrium price. Consumers are willing to buy because of the high demand, but vendors are not. As a result, the price will climb.

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