If the price in a competitive market falls and goes below the equilibrium price, then consumer surplus might increase, but producer surplus will definitely decrease. The above statement is true.
What is equilibrium price?
- On a diagram, when two lines intersect, it usually means something. On a graph, the equilibrium is represented by the intersection of the supply and demand curves (S and D).
- The only price at which consumer and producer desires coincide is equilibrium, or when the quantity of the good that consumers want to buy (quantity demanded) equals the quantity that producers want to sell (quantity supplied).
- The equilibrium quantity is that amount that both parties seek equally. Any other price causes the market to be out of equilibrium since the amount requested does not match the quantity supplied.
To know about equilibrium price with the given link https://brainly.com/question/14480835
#SPJ4
