Suppose that a market for a product is in equilibrium at a price of $5 per unit. At any price above $5 per unit

Question

Quizplus · Accepted Answer

At any price above the equilibrium price, there will be excess supply of the product because the quantity supplied will exceed the quantity demanded, leading to a surplus. This will put pressure on sellers to lower the price in order to clear the surplus and bring the market back to equilibrium.

Suppose That a Market for a Product Is in Equilibrium