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13 October, 22:52

Based on the laws of supply and demand, which situation would lead to a shortage?

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  1. 14 October, 01:26
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    The answer is: The price of a product falls below the equilibrium price.

    According to the laws of supply, the amount of supply would decrease as the price of product fall.

    This happen because the producers would obtain lesser amount of profit if they choose to sell the products with falling price. Since there would be less and less producers who willing do supply it, it eventually lead to a shortage.
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