The price of a product falls if
A) there is a shortage of the product.
B) demand for the product increases.
C) there is a surplus of the product.
D) supply of the product decreases.
E) demand for the product does not change.

Question

Quizplus · Accepted Answer

When there is a surplus of a product, meaning there is more supply of the product than demand for it, sellers will lower prices in order to sell off excess inventory. This leads to a decrease in the price of the product.

The Price of a Product Falls If