Question

if a shortage exists in the market, what will most likely happen to price over time?

• prices will rise
• prices will disappear
• production will stop
• prices will fall

Explanation:

In a market with a shortage, demand exceeds supply. Sellers can raise prices as buyers compete for limited goods/services, moving toward equilibrium. "Prices will disappear" and "Production will stop" are illogical. A shortage (not surplus) doesn't cause price drops. So the correct choice is "Prices will rise".

Answer:

A. Prices will rise