In the case of a surplus,
A)there is no market adjustment because buyers can purchase what they want.
B)the quantity supplied exceeds the quantity demanded at the current price level.
C)producer incomes will fall and production will rise in order to make up for the shortfall.
D)market price will rise.
E)the quantity demanded exceeds the quantity supplied at the current price level.

Question

Quizplus · Accepted Answer

A surplus occurs when the quantity supplied exceeds the quantity demanded at the current price level. This leads to an excess supply which puts downward pressure on prices. In order to clear the surplus, producers may reduce their prices and/or decrease production.

In the Case of a Surplus