Assume the market for hammers is perfectly competitive and the current price is $15.If,at this price,the quantity of hammers demanded is 15,000,while the quantity supplied is 25,000,then
A)the market for hammers is in equilibrium.
B)the price of hammers is likely to increase.
C)the price of hammers is likely to decrease.
D)there would be no change in price.

Question

Quizplus · Accepted Answer

At the current price of $15, there is excess supply in the market as the quantity supplied is greater than the quantity demanded. This suggests that some suppliers may not be able to sell all their hammers, and may be willing to lower their prices to clear their inventory. Therefore, the price of hammers is likely to decrease in order to restore equilibrium in the market.

Assume the Market for Hammers Is Perfectly Competitive and the Current