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13 August, 16:19

As long as the actual market price exceeds the equilibrium market price, there will be:

a. Downward pressure on the market price

b. Upward pressure on the market price

c. No purchases made

d. Both A and C are correct

e. Both B and C are correct

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Answers (1)
  1. 13 August, 19:25
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    The answer is a. Downward pressure on the market price

    Explanation:

    As the market price is set above the equilibrium price, this is a lower demand level comparatively to a higher supply level (draw it and you'll see it!)

    So this level. of price is not a sustainable level both for the demanders and the suppliers. Because of that, naturally there is a downward pressure on price to go down.
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