Which of the following will occur when the market is unstable?

Assessment: WAEC SSCE - Economics - 2000 (Objective) Subject: Economics

Question 1 Report

Which of the following will occur when the market is unstable?
Answer Details
When the market is unstable, prices tend to fluctuate. This is because the market is not in equilibrium, which means that there is an imbalance between the quantity of goods supplied and the quantity of goods demanded. As a result, buyers and sellers are constantly adjusting their behavior, which causes the price to rise or fall until a new equilibrium is reached. Therefore, the correct answer is: "Price will fluctuate". The other options are not necessarily true when the market is unstable.
Read lesson note on Methods And Tools Of Economic Analysis (JAMB)
Read lesson note on Theory Of Production (WAEC)
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