If the market price is above the equilibrium price,

Question

Quizplus · Accepted Answer

If the market price is above the equilibrium price, it means that there is a surplus of goods in the market. In this situation, producers will produce less because they are not selling enough and they will lower prices to sell more. Therefore, choice B is the correct answer. Choice A is incorrect because producers will not produce more when faced with a surplus. Choice C is also incorrect because consumers will not bid prices up in a market with surplus goods. Choice D is not necessarily true as high profits will depend on the elasticity of demand and supply in the market.

If the Market Price Is Above the Equilibrium Price