Suppose that a market for a product is in equilibrium at a price of $5 per unit. At any price above $5 per unit.

A. There will be an excess demand for the product.

B. There will be an excess supply of the product.

C. The quantity supplied of the product will be less than the quantity demanded of that product.

D. There will be a shortage of that product.

The answer is D

No. There will be items on the rack unsold.

To determine the correct answer, let's first understand what each option means:

A. Excess demand refers to a situation where the quantity demanded of a product exceeds the quantity supplied at a particular price.

B. Excess supply refers to a situation where the quantity supplied of a product exceeds the quantity demanded at a particular price.

C. Quantity supplied is the amount of a product that producers are willing and able to sell at a given price.

D. Shortage refers to a situation where the quantity demanded of a product exceeds the quantity supplied at a particular price, resulting in an insufficient supply.

Now, let's analyze the given scenario. The market for a product is in equilibrium at a price of $5 per unit. This means that the quantity demanded is equal to the quantity supplied at that price.

If the price is increased above $5 per unit, it would lead to an increase in the quantity supplied as producers would be incentivized to sell more at a higher price. However, the quantity demanded would decrease as consumers tend to buy less at a higher price.

As a result, the quantity demanded would be less than the quantity supplied at a price above $5 per unit. This would create a shortage in the market, as the quantity demanded exceeds the quantity supplied.

Therefore, the correct answer is D. There will be a shortage of that product.

To determine the correct answer to this question, we need to understand the concept of market equilibrium and how it relates to the supply and demand of a product.

Market equilibrium occurs when the quantity demanded of a product matches the quantity supplied. At this point, there is no shortage or surplus, and the market is considered stable.

In this scenario, the market is in equilibrium at a price of $5 per unit. This means that the quantity demanded at this price is equal to the quantity supplied. However, the question asks about the situation when the price is above $5 per unit.

When the price of a product is set above the equilibrium price, it creates an imbalance in the market. This is because the price is higher than what consumers are willing to pay based on their demand, while it is still profitable for producers to supply.

Now let's analyze the options:

A. There will be an excess demand for the product.
Incorrect. Excess demand occurs when the quantity demanded is greater than the quantity supplied. However, in this scenario, the quantity supplied will be greater than the quantity demanded.

B. There will be an excess supply of the product.
Incorrect. Excess supply occurs when the quantity supplied is greater than the quantity demanded. However, in this scenario, the quantity demanded will be greater than the quantity supplied.

C. The quantity supplied of the product will be less than the quantity demanded of that product.
Incorrect. As mentioned earlier, in this scenario, the quantity supplied will be greater than the quantity demanded.

D. There will be a shortage of that product.
Correct. When the price is set above the equilibrium price, it leads to a situation where the quantity demanded is less than the quantity supplied. This creates a shortage in the market, as consumers are unable to purchase the desired amount of the product at the higher price.

Therefore, the correct answer is D. There will be a shortage of that product.