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Please can see answer this fast. Briefly explain how the market mechanism relieves excess demand.​
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37 votes
Please can see answer this fast. Briefly explain how the market mechanism relieves excess demand.​

User Gordon Thompson
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18 votes

Answer:

The decrease in supply creates an excess demand at the initial price. a. Excess demand causes the price to rise and quantity demanded to decrease. ... A decrease in demand and an increase in supply will cause a fall in equilibrium price, but the effect on equilibrium quantity cannot be determined.

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User Dvancouver
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