Question

Suppose there is an excess demand for cell phones. In a market without price controls, market pressures will cause the price of cell phones to _____ until it reaches the equilibrium price.

Answer 1

In a market without price controls, the actual price, the equilibrium price, is generated from the relation between bidders and claimants. The demand is the global price that shows the purchasing intentions of consumers. When there is a excess of it, the producers rise the prices so they can afford they production level until they reach the new equilibrium price. So the right answer is RISE.

Answer 2

Market pressure will cause the price of cell phones rise until it reaches the equilibrium price