If, for a product, a. the quantity supplied exceeds the quantity demanded, the market price will fall until all consumers will be able to afford the product. b. the quantity demanded exceeds the quantity supplied. The market will then be in equilibrium. c. quantity demanded equals quantity supplied. The market price will then equal the equilibrium price. d. quantity demanded equals quantity supplied. The equilibrium price will then be lower than the market price.

Question

Business

Skylar Elliott

6 April, 21:03

If, for a product, a. the quantity supplied exceeds the quantity demanded, the market price will fall until all consumers will be able to afford the product. b. the quantity demanded exceeds the quantity supplied. The market will then be in equilibrium. c. quantity demanded equals quantity supplied. The market price will then equal the equilibrium price. d. quantity demanded equals quantity supplied. The equilibrium price will then be lower than the market price.

+1

Answers (1)

Know the Answer?

Davian Meyer · Answer 1

The correct statement here is option c.

Explanation:

Equilibrium is achieved in a market when the quantity demanded is equal to quantity supplied. When these two variables are equal, then the market price is equal to equilibrium price.

When quantity demanded is more than quantity supplied, there will be excess demand and deficit in supply. In this case, the market price will increase till equilibrium is achieved.

Similarly, when there is excess of supply, then the price will fall till it reaches equilibrium.