Question

A Wall Street Journal headline reads: "Cigar Shortage Draws New Brands into Market." The shortage resulted from a renewed interest in smoking cigars. What best describes facts behind the headline? Multiple Choice Supply has shifted to the right. Price has fallen somewhat, but not enough to equilibrate supply and demand. Demand has shifted to the right. Price has risen somewhat, increasing quantity supplied, but not enough to equal quantity demanded. Demand has shifted to the right and price has risen to equilibrate supply and demand. Supply has shifted to the left. Price has risen somewhat, but not enough to equilibrate supply and demand.

Answer 1

Price is too low, quantity demanded exceeds quantity supplied

Step-by-step explanation:

A shortage occurred when the amount of products that available in the market cannot match the amount of demand from the customers who are willing to buy it.

This can serve as an indication that sellers of the cigar could increase the price of the product in order to obtain more profit . Eventually, the market will find the equilibrium price that represent a balance between the product's supply and the product's demand.