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Which of these statements about a glut in a market is false? A. It results when...

Which of these statements about a glut in a market is false?

A. It results when the market demand for a good is less than it market supply

B. It results when the price of a good is set above its competitive equilibrium price

C It results when the market demand for a good is greater than its market supply

D. All of the above

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Answer #1

Option A.

  • Glut is a market situation which results when the Market demand for a good is less than its Market supply.
  • This usually occurs when there is excess production of any good even when it is not on demand.
  • Due to the excess supply and falling demand, there is a substantial fall in the price of those goods.
  • For example :- The mobile phones are said to have excess glut in the market today as there is excess production of cell phones but the demand is comparatively lower than the supply.
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