20.2k views
4 votes
Suppose you produce T-shirts, and the equilibrium price for a T-shirt is $5. You haven't really done much research, so you decide to charge a price of $3 per shirt. At this price, there will be an _____ of T-shirts.

1 Answer

3 votes

excess demand, as its a lower price than the normal price and much lower than the competition, people will flock over to that shirt brand that is only 3$, and supply will quickly decrease, until none is left, because when a company can go lower than another, people will normally go for the lower price goods as long as its of similar quality.

User Ted Feng
by
8.8k points

No related questions found