When the price of a good is above its equilibrium value,
A) consumers will bid the price up.
B) excess demand will occur.
C) it will tend to stay above the equilibrium value.
D) suppliers will notice their inventories are shrinking.
E) suppliers will lower the price.

Question

Quizplus · Accepted Answer

When the price is above the equilibrium value, there is excess supply, leading suppliers to lower the price to increase sales and reach equilibrium.

When the Price of a Good Is Above Its Equilibrium