Deficient demanda)Market price is same as the equilibrium priceb)Market price is higher than the equilibrium pricec)Market price is lower than the equilibrium priced)None of theseCorrect answer is option 'B'. Can you explain this answer?

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Correct answer should be C

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Crrct answer is B This is so because

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Yes of us the answer is a but now the question is why only the is the answer the answer is only a because if total utility is increasing so the marginal utility is also increasing and if total utility is constant so the marginal utility is also constant and in the case of the total utility is decreasing so the marginal utility is also decreasing so that's my answer thank you

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Deficient demand refers to the situation when aggregate demand is short of aggregate supply corresponding to full employment level in the economy. Aggregate supply being perfectly elastic, it converges with aggregate demand at a lower level of output lower than the full employment level of output in the economy

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Deficient demand

Deficient demand occurs when the market price is higher than the equilibrium price. This means that the quantity of goods or services supplied by producers exceeds the quantity demanded by consumers at the prevailing price level.

Causes of deficient demand

1. High prices: When prices are set too high, consumers may not be willing or able to purchase the goods or services, leading to deficient demand.

2. Low consumer income: If consumers have low income levels, they may not be able to afford goods or services at the current price, resulting in deficient demand.

3. Changes in consumer preferences: If consumer preferences shift away from a particular product, demand may decrease, causing deficient demand.

Effects of deficient demand

1. Surplus of goods: Producers will be left with excess inventory that they are unable to sell, leading to a surplus of goods in the market.

2. Price reductions: To stimulate demand, producers may be forced to lower prices, which can impact their profitability.

3. Unemployment: If producers are unable to sell their goods or services due to deficient demand, they may need to reduce production, leading to potential job losses.

In conclusion, deficient demand occurs when the market price is higher than the equilibrium price, resulting in an imbalance between supply and demand. This can have negative consequences for both producers and consumers in the market.

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