Assume there is a surplus in the market for hybrid automobiles.Which of the following statements correctly describes this situation?
A)The supply of hybrid automobiles is greater than the demand for hybrid automobiles.
B)Some consumers will be unable to obtain hybrid automobiles at the market price and will have an incentive to offer to buy the product at a higher price.
C)The price of hybrid automobiles will fall in response to the surplus;as the price falls the quantity demanded will increase and the quantity supplied will decrease.
D)The surplus will cause an increase in the equilibrium price of hybrid automobiles.

Question

Quizplus · Accepted Answer

A surplus in the market indicates that there is excess supply, meaning that the quantity supplied exceeds the quantity demanded. As a result, sellers will need to lower the price of hybrid automobiles in order to attract enough demand to clear the surplus. This is consistent with choice C, which correctly states that the price of hybrid automobiles will fall in response to the surplus, leading to an increase in the quantity demanded and a decrease in the quantity supplied. Choices A, B, and D are incorrect because they suggest outcomes that are inconsistent with the concept of a surplus.

Assume There Is a Surplus in the Market for Hybrid