Say's Law
A) cannot be satisfied if there is excess supply or demand in individual markets in the long run
B) ensures that every firm will sell all of its output
C) can be satisfied even if there is a general overproduction or underproduction of goods in the economy
D) is satisfied only if every market clears in the short run
E) shows that the total value of spending in the economy will equal the total value of the output produced

Question

Quizplus · Accepted Answer

Say's Law states that production creates its own demand, meaning that the total value of spending in the economy will equal the total value of the output produced. It does not necessarily require every firm to sell all of its output or every market to clear in the short or long run. It is possible for there to be excess supply or demand in individual markets, but as long as overall spending equals overall production, Say's Law is satisfied.