Suppose the current price of a pound of steak is $12 per pound and the equilibrium price is $9 per pound.In this case,there is a
A) shortage, so the price falls and quantity demanded increases.
B) surplus, so the price falls and quantity demanded increases.
C) shortage, so the price rises and quantity demanded decreases.
D) surplus, so the price rises and quantity demanded increases.
E) surplus, so the price falls and quantity supplied increases.

Question

Quizplus · Accepted Answer

When the current price is above the equilibrium price, it means that the quantity supplied exceeds the quantity demanded, leading to a surplus. As a result, the price tends to fall to reach equilibrium, and as the price falls, the quantity demanded increases because consumers are more willing to buy the product at lower prices.

Suppose the Current Price of a Pound of Steak Is