If there is a surplus in a housing market, what can be expected?
A) Housing prices to be decreasing until shortage is eliminated.
B) Housing prices to be increasing until shortage is eliminated.
C) Housing prices to either be increasing or decreasing.
D) Housing prices to stay the same.

Question

Quizplus · Accepted Answer

When there is a surplus in the housing market, it means that the supply of houses exceeds the demand. To eliminate this surplus and balance the market, sellers are likely to lower their prices. This decrease in housing prices continues until the surplus is eliminated, making option A correct.

If There Is a Surplus in a Housing Market, What