Which of the following will tend to occur when a surplus exists in a market?
A) supply will increase and demand will decrease until the surplus disappears.
B) supply will decrease and demand will increase until the surplus disappears.
C) the price will tend to rise over time.
D) the price will tend to decrease over time.

Question

Quizplus · Accepted Answer

When a surplus exists in a market, it means that there is an excess supply of goods over the demand for those goods. As a result, sellers will want to decrease the price of their goods to attract buyers, and buyers will be less motivated to purchase because they have more options. This will ultimately result in a decrease in the price of goods over time until the surplus is eliminated. Therefore, the correct answer is that the price will tend to decrease over time.

Which of the Following Will Tend to Occur When a Surplus