When there is an excess quantity supplied in the market
A) the price of the product will increase, causing a decrease in demand and an increase in supply.
B) the price of the product will increase, causing a decrease in quantity demanded and an increase in supply.
C) the price of the product will decrease, causing an increase in quantity demanded and a decrease in quantity supplied.
D) the price will increase, causing a decrease in demand and an increase in quantity supplied.

Question

Quizplus · Accepted Answer

When there is an excess quantity supplied in the market, it indicates that the supply of the product exceeds the demand at the current price. To eliminate this surplus, sellers will lower the price. This price decrease makes the product more attractive to buyers, increasing the quantity demanded, while suppliers are likely to reduce the quantity they supply due to the lower price, thus moving towards market equilibrium.

When There Is an Excess Quantity Supplied in the Market