What Happens When There Is a Surplus in a Market

question 304

Multiple Choice

What happens when there is a surplus in a market?

• A) There is upward pressure on price.
• B) There is downward pressure on price.
• C) The market is operating below the equilibrium level.
• D) There are too many buyers chasing too few goods.

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Definitions:

Total Revenue

The total income received from sales of goods or services before any expenses are subtracted.

Elastic

A term used in economics to describe a situation where the quantity demanded or supplied of a good is sensitive to changes in its price.

Price Elasticity

An indicator showing the demand for a good's responsiveness to its price alterations.

Consumer Purchases

Transactions in which individuals buy goods or services for personal use or consumption.