A surplus currently exists for a product called widgets.In a free market system,the government must step in and buy any widgets that consumers do not buy in order to eliminate the surplus and establish equilibrium.
Level of Learning 2: Understanding of concepts and principles

Question

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In a free market system, the government does not have to step in and buy any excess products. The market forces of supply and demand should eventually lead to a lower price for widgets, which will encourage more consumers to buy them and reduce the surplus.

A Surplus Currently Exists for a Product Called Widgets