Suppose that the quantity supplied of pizza exceeds the quantity demanded for pizza. We would expect that:

Question

Quizplus · Accepted Answer

When the quantity supplied of pizza exceeds the quantity demanded, there will be a surplus of pizza in the market, which means that there will be extra pizzas that are not being sold. In order to encourage customers to buy more pizza and reduce the surplus, pizza sellers will have to decrease the price of pizza, which will eventually lead to an increase in the quantity demanded and a decrease in the quantity supplied until the market reaches equilibrium. Therefore, the price of pizza is expected to decrease when the quantity supplied exceeds the quantity demanded.

Suppose That the Quantity Supplied of Pizza Exceeds the Quantity