Question

A Wall Street Journal headline reads: "Cigar Shortage Draws New Brands into Market." The shortage resulted from a renewed interest in smoking cigars. Most likely price for cigars was:

Answer 1

Answer:

Most likely price for cigars was too low because quantity demanded exceeded quantity supplied.

Explanation:

A. too low because demand exceeded supply.

B. too low because quantity demanded exceeded quantity supplied.

C. too high because supply exceeded demand.

D. too high because quantity supplied exceeded quantity demanded.

It is stated that there is a shortage of cigarettes, this means that it was no possible to fulfill the quantity of product that was being demanded by the customers, then the most possible situation is that because of the low cost of the product it became more popular leading to losing the balance between demand and supply.