If the price is above the equilibrium price in the market for grapefruit, assuming a positively sloped supply curve and a negatively sloped demand curve, total surplus:
A) will increase.
B) will decrease.
C) will not change.
D) may change, but we cannot determine the change without more information.

Question

Quizplus · Accepted Answer

When the price is above the equilibrium price, there is a surplus of grapefruit, leading to inefficiencies in the market. This results in a decrease in total surplus because not all mutually beneficial trades are occurring.

If the Price Is Above the Equilibrium Price in the Market