Figure 3-6
-Which of the following is evidence of a surplus of bananas?
A) Firms raise the price of bananas.
B) The price of bananas is lowered in order to increase sales.
C) The equilibrium price of bananas rises due to an increase in demand.
D) The quantity demanded of bananas is greater than the quantity supplied.

Question

Figure 3-6 
-Which of the following is evidence of a surplus of bananas?
A) Firms raise the price of bananas. 
B) The price of bananas is lowered in order to increase sales. 
C) The equilibrium price of bananas rises due to an increase in demand. 
D) The quantity demanded of bananas is greater than the quantity supplied.

Quizplus · Accepted Answer

If there is a surplus of bananas, there will be more bananas supplied than demanded, which may lead to a decrease in price in order to increase sales and reduce inventory. Therefore, the best choice is B; the price of bananas is lowered in order to increase sales. Firms won't raise the price of bananas in response to a surplus since it would likely result in even fewer sales. The equilibrium price will not rise as a result of a surplus, and the quantity demanded will not be greater than the quantity supplied in the case of a surplus.

Figure 3-6 -Which of the Following Is Evidence of a Surplus of a Surplus