If automobile manufacturers are producing cars faster than people want to buy them,
A) there is an excess supply and price can be expected to decrease.
B) there is an excess supply and price can be expected to increase.
C) there is an excess demand and price can be expected to decrease.
D) there is an excess demand and price can be expected to increase.

Question

Quizplus · Accepted Answer

When manufacturers produce cars faster than people want to buy them, it leads to an excess supply of cars on the market. According to basic economic principles, when supply exceeds demand, prices typically decrease to encourage more purchases and balance the market.

If Automobile Manufacturers Are Producing Cars Faster Than People Want