If the market price is above the equilibrium price,

Name: If the market price is above the equilibrium price,
Brand: Quizplus
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Question

Quizplus · Accepted Answer

If the market price is above the equilibrium price, it means that there is an excess supply or surplus in the market. Producers will find themselves with excess supply and will produce less in order to reduce their inventory, which will result in lower prices. As the price decreases, demand will increase and the surplus will eventually be eliminated, bringing the market back to equilibrium.

If the Market Price Is Above the Equilibrium Price