When there is an excess quantity demanded of a product at the current price, then:
A)the price will tend to fall.
B)the price will tend to rise.
C)the price must be above the equilibrium price.
D)producers will reduce output and sales will fall.

Question

When there is an excess quantity demanded of a product at the current price, then:
A)​the price will tend to fall.
B)​the price will tend to rise.
C)​the price must be above the equilibrium price.
D)​producers will reduce output and sales will fall.

Quizplus · Accepted Answer

When there is an excess quantity demanded at the current price, it indicates that the demand for the product exceeds the supply at that price. This situation typically leads to an increase in price as sellers can charge more due to the higher demand, thus the price will tend to rise to reach a new equilibrium.

When There Is an Excess Quantity Demanded of a Product