A surplus exists in the market for Barbie dolls at the prevailing price. What will eliminate the surplus?

Question

Quizplus · Accepted Answer

A price decrease will lower the quantity supplied and increase the quantity demanded, leading to a reduction in the surplus. option B is incorrect because a decrease in supply would worsen the surplus. Option C is incorrect because an increase in price would further decrease demand and increase supply, worsening the surplus. Option D is incorrect because it goes against the law of demand, which states that as price decreases, quantity demanded increases.

A Surplus Exists in the Market for Barbie Dolls at the Prevailing