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9 - 9 Disequilibrium Suppose the market for hamburgers Is...

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Unformatted text preview: 9. Disequilibrium Suppose the market for hamburgers Is unregulated. That Is, hamburger prices are free to adjust based on the forces of supply and demand. If a shortage exists in the hamburger market, then the current price must be lower if than the equilibrium price, and you would expect buyers to ofier higher prices J . Explanation: um A Fries below the equilibrium price generate emess demand bemuse buyers are willing and able to purchase more hamburgers than sellers are willing and able to sell—the quantity supplied ls less than the quantlty demanded at that price. Some buyers who wish to purchase hamburgers at the current pnoe will be unable to do so. In order to obtain them, some buyers will offer higher prices. As buyers bld prices upward, some sellers will be willing to sell additlonal hamburgers. Therefore, the market will move toward the equlllbrlum prloe, where the quantlty of hamburgers demanded by buyers exactly equals the quantity supplied by sellers. ...
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