What can happen if the price of a product falls to an unsustainable level?

When the price of a product falls to an unsustainable level, companies may decide to withdraw from the market. This situation typically arises when the selling price does not cover the cost of production, leading to potential losses for the business. If companies are unable to maintain profitability due to consistently low prices, they might choose to cease production or leave the market entirely.

This withdrawal can be a strategic decision to avoid further financial losses and can also indicate deeper market issues, such as oversupply or decreased consumer demand.

The other options are less aligned with typical market behavior. While demand can sometimes increase with lower prices, this is not guaranteed and depends heavily on various factors, such as consumer perception and the nature of the product. Supply usually adjusts according to market conditions, so it may not remain high if prices fall below a sustainable threshold. Lastly, while consumer purchasing may decrease, it is unlikely to halt entirely as consumers may still seek value deals. Thus, option B represents a logical consequence of unsustainable pricing in the market.