If the market price is above the equilibrium price, which of the following will occur?
A) Quantity demanded will exceed quantity supplied and the market price will eventually fall.
B) Quantity demanded will exceed quantity supplied and the market price will eventually rise.
C) Quantity supplied will exceed quantity demanded and the market price will eventually fall.
D) Quantity supplied will exceed quantity demanded, and the market price will eventually rise.

Question

Quizplus · Accepted Answer

When the market price is above the equilibrium price, quantity supplied will exceed quantity demanded as producers are willing to supply more at a higher price, while demanders will only demand a certain quantity at the higher price. This excess supply will create a surplus in the market, which will put downward pressure on the price until it reaches the equilibrium point where quantity demanded and quantity supplied are equal.

If the Market Price Is Above the Equilibrium Price, Which