Question

If actual production and consumption occur at q2, what is the impact on the market equilibrium?

1) The market is in equilibrium
2) There is excess production
3) There is excess consumption
4) The market is in disequilibrium

Answer 1

If actual production and consumption occur at q2, there would be excess consumption, impacting the market equilibrium.

Step-by-step explanation:

In a market, equilibrium occurs when the quantity demanded equals the quantity supplied. If actual production and consumption occur at q2, it means that the quantity consumed exceeds the quantity produced, resulting in excess consumption. Therefore, the impact on the market equilibrium in this scenario would be option 3) There is excess consumption.