The market pricing system corrects an excess supply by
A) raising the product price and increasing producer profits.
B) lowering the product price and decreasing producer profits.
C) raising the product price and decreasing producer profits.
D) lowering the product price and increasing producer profits.

Question

Quizplus · Accepted Answer

When there is excess supply, prices tend to decrease to encourage more consumers to buy the product, which can lead to decreased producer profits until the market reaches equilibrium.

The Market Pricing System Corrects an Excess Supply by