Question

Assume there is initially a shortage in the market, as market participants respond to rising price, the market return to an equilibrium where the quantity supplied equals the quantity demanded, resulting in __________.

Answer 1

Elimination of a shortage

Step-by-step explanation:

The reason is that when the demand increases and suppliers are charging high then the product moves out of the customers purchasing power range and as a result the demand of the product falls which equals the demand and supply of the product. So at this state, the shortage of the product is eliminated by equaling the demand to supply by charging high prices.

Answer 2

Step-by-step explanation:

The market returns to an equilibrium resulting in the elimination of shortage.