Which one of the following correctly describes how price adjustment eliminates a surplus?

Question

Quizplus · Accepted Answer

When there is a surplus, it means that the quantity supplied exceeds the quantity demanded at the current price. To eliminate the surplus, the price must be lowered to increase the quantity demanded and decrease the quantity supplied. This is because at a lower price, consumers will demand more of the good and suppliers will be willing to supply less of it. Therefore, as the price falls, the quantity demanded increases and the quantity supplied decreases, eventually leading to an equilibrium where the quantity demanded equals the quantity supplied and the surplus is eliminated.

Which One of the Following Correctly Describes How Price Adjustment