If producers incorrectly set the price of their product too high a:

Question

Quizplus · Accepted Answer

If producers set the price of their product too high, it will result in a surplus of goods in inventory, meaning that consumers are not willing to pay that price. This excess supply will signal to producers to lower their prices in order to sell off the excess goods and avoid further inventory build-up. This process will continue until the price reaches an equilibrium level at which the quantity supplied equals the quantity demanded.

If Producers Incorrectly Set the Price of Their Product Too