What occurs when the market price is above the equilibrium price?ShortageSurplusNo changeDemand shifts to the left
Question
What occurs when the market price is above the equilibrium price?ShortageSurplusNo changeDemand shifts to the left
Solution
When the market price is above the equilibrium price, a surplus occurs. This is because the quantity supplied exceeds the quantity demanded. Sellers will lower prices in order to clear their excess inventory. This process continues until the market reaches equilibrium again.
Similar Questions
Effects of shifts in demand and supply on market equilibrium
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