State true or false and justify your answer:

At prices below equilibrium, the quantity exchanged is equal to the quantity supplied.

True, when the prices are below the equilibrium, there is excess demand or rather a shortage in supply. Therefore, the quantity demanded exceeds the quantity supplied. Quantity exchanged refers to the equilibrium quantity. At equilibrium, quantity supplied equals quantity demanded. However, when prices are below equilibrium, the amount exchanged equals the quantity supplied. If unregulated, the market will automatically adjust where suppliers will increase their productivity to cater to the excess demand, thus restoring the price and quantity to equilibrium. According to the law of demand and supply, an increase in demand (excess demand) leads to a rise in the price of goods.