If a surplus exists in a market, then we know that the actual price is
a. above the equilibrium price, and quantity supplied is greater than quantity demanded.
b. above the equilibrium price, and quantity demanded is greater than quantity supplied.
c. below the equilibrium price, and quantity demanded is greater than quantity supplied.
d. below the equilibrium price, and quantity supplied is greater than quantity demanded.
Answer: a. above the equilibrium price, and quantity supplied is greater than quantity demanded.
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An increase in money income shifts the consumer's:
A) budget line to the right. B) budget line to the left. C) indifference curves to the left. D) indifference curves to the right.
The economic argument for legalizing drugs
a. is morally bankrupt. b. is based on the assumption that demand is relatively price inelastic. c. shows that economists are all libertarians at heart. d. takes into consideration all the externalities associated with drug use. e. is really politically motivated.