Question

If a shortage exists in the market, the invisible hand will manipulate prices to maintain equilibrium by increasing prices and thereby reducing future quantity supplied. decreasing prices and thereby increasing future quantity supplied. increasing prices and thereby raising future quantity supplied. decreasing prices and thereby reducing future quantity supplied.

Answer 1

Answer:

increasing prices and thereby raising future quantity supplied

Explanation:

To understand this question, we can use the help of a standard supply and demand plot.  At price 0 there’s a shortage because the quantity demanded is greater than the quantity supplied. This will generate prices to go up until it reaches the equilibrium price, which in turn will generate quantities to go up. Thus the gap between quantity demanded and supplied, the shortage, will disappear