If the price is above the equilibrium price in the market for apples,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:
A) will be greater than if price were at equilibrium.
B) will be less than if price were at equilibrium.
C) will be the same as if price were at equilibrium.
D) may be different than if price were at equilibrium,but we cannot determine this without more information.

Question

Quizplus · Accepted Answer

When the price is above the equilibrium price in the market for apples, there is a surplus of apples which leads to a decrease in the quantity demanded and an increase in the quantity supplied. As a result, some potential buyers will not be able to buy apples at the higher price, and some sellers will have unsold apples. This reduces consumer surplus and producer surplus, which in turn reduces total surplus. Therefore, total surplus will be less than if the price were at equilibrium.

If the Price Is Above the Equilibrium Price in the Market