Practice mode Market

What happens when the price of a good is set above the equilibrium price?

Correct answer D. There is a surplus and the price will fall

Explanation

Above equilibrium, sellers offer more than buyers want, creating a surplus. Unsold stock leads sellers to cut prices until the market returns to equilibrium.

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What happens when the price of a good is set above the equilibrium price?

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What happens when the price of a good is set above the equilibrium price?

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