Asked by Maria Fernández on Sep 24, 2024
Verified
In a market where the equilibrium price is $7,any price higher than $7 would cause
A) a balanced demand and supply
B) an excess supply
C) an excess demand
D) none of the above
Equilibrium Price
The price at which the supply of an item matches its demand, ensuring that the market is in balance.
Excess Supply
A situation where the quantity of a good or service supplied surpasses the quantity demanded at a specific price.
Excess Demand
Excess demand occurs when the quantity demanded of a product or service at a given price exceeds the quantity supplied, often leading to a shortage.
- Comprehend the methodology for achieving market equilibrium and the consequences of diverging from this state.
Verified Answer
TS
Thabang Sithole3 days ago
Final Answer :
B
Explanation :
At any price higher than the equilibrium price, the quantity supplied will exceed the quantity demanded, leading to an excess supply.
Learning Objectives
- Comprehend the methodology for achieving market equilibrium and the consequences of diverging from this state.