Suppose roses are currently selling for $40 per dozen.The equilibrium price of roses is $30 per dozen.What would we expect?

Question

Quizplus · Accepted Answer

At the current selling price of $40 per dozen, there will be excess supply of roses as the quantity supplied will be higher than quantity demanded. This will lead to a surplus of roses in the market. To clear the surplus, producers will lower the price of roses which will lead to a decrease in the market price of roses. Therefore, we would expect a surplus to exist and the market price of roses to decrease, which is option D.

Suppose Roses Are Currently Selling for $40 Per Dozen