When there is an excess quantity supplied of a product at the current price, then:
A)the market price must be below equilibrium price.
B)the quantity demanded is greater than the equilibrium quantity.
C)the market price will tend to rise.
D)the market price will tend to fall.

Question

When there is an excess quantity supplied of a product at the current price, then:
A)​the market price must be below equilibrium price.
B)​the quantity demanded is greater than the equilibrium quantity.
C)​the market price will tend to rise.
D)​the market price will tend to fall.

Quizplus · Accepted Answer

When the quantity supplied exceeds the quantity demanded, it leads to a surplus in the market, and suppliers will need to lower the price to encourage consumers to purchase more, which results in a downward pressure on the market price. Therefore, the market price will tend to fall.

When There Is an Excess Quantity Supplied of a Product