If the price is above the equilibrium price,then
A)none of the good will be sold.
B)the price must rise further to reach the new market equilibrium.
C)a surplus exists.
D)a shortage exists.
E)price will not change;producers will cut back production until the market is in equilibrium.

Question

Quizplus · Accepted Answer

If the price is above the equilibrium price, it means that the quantity supplied by producers is greater than the quantity demanded by consumers. This results in a surplus of the good, which means that some of the goods will not be sold. In order to reach a new market equilibrium, the price must decrease to increase the quantity demanded or producers must decrease supply by cutting back production.

If the Price Is Above the Equilibrium Price,then