When there is excess supply of a product in a market,
A) price will tend to rise.
B) price must be above the equilibrium price.
C) producers will expand output and sales will rise.
D) price must be below the equilibrium price.

Question

Quizplus · Accepted Answer

When there is excess supply, it indicates that the price is above the equilibrium price, leading to a surplus as producers supply more than consumers demand at that price level.

When There Is Excess Supply of a Product in a Market