When there are product surpluses due to too large a supply, an equilibrium point will be reached if
A) consumer demand further shrinks.
B) consumers bid up prices.
C) sellers reduce prices.
D) competitors enter the market.

Question

Quizplus · Accepted Answer

An equilibrium point is reached when supply equals demand. If there is a surplus, reducing prices will help increase demand or reduce the surplus until it matches the current level of demand, thus moving towards equilibrium.

When There Are Product Surpluses Due to Too Large a Supply