The following figure gives both supply and demand curves for a certain product. If the price is $75 per item, would you expect the market pressures to push the price higher or lower?
A)higher
B)lower

Question

The following figure gives both supply and demand curves for a certain product. If the price is $75 per item, would you expect the market pressures to push the price higher or lower? 
A)higher 
B)lower

Quizplus · Accepted Answer

At a price of $75 per item, the quantity demanded is higher than the quantity supplied, creating a surplus. This means that there is more supply than demand at this price, which puts downward pressure on prices. As a result, the market pressures would push the price lower.

The Following Figure Gives Both Supply and Demand Curves for a Certain