Question

If the quantity supplied of a product exceeds the quantity demanded for that same product at...

If the quantity supplied of a product exceeds the quantity demanded for that same product at a hypothetical market price, the market will experience a surplus of the product and the market price will likely rise in the future to eliminate that surplus

Homework Answers

Answer #1

This statement is false because when there is a gap between demand and supply and quantity supplied is more than quantity demanded, then the excess supply will lead to decrease in price of the good as the suppliers have to cut prices to sell their excess stock. After they cut prices, the quantity demanded of that good will increase and market will be back to equilibrium. Thus, price will decrease to eliminate the surplus.

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