If price is above the equilibrium level, competition among sellers to reduce the resulting

Question

Quizplus · Accepted Answer

When the price is above the equilibrium level, it results in a surplus because the quantity supplied exceeds the quantity demanded. Competition among sellers to reduce this surplus will lead to a decrease in price, which increases the quantity demanded (as consumers are more willing to buy at lower prices) and decreases the quantity supplied (as producers are less willing to supply at lower prices).

If Price Is Above the Equilibrium Level, Competition Among Sellers