A Surplus Exists in a Market If

question 139

Multiple Choice

A surplus exists in a market if

• A)there is an excess demand for the good.
• B)quantity demanded exceeds quantity supplied.
• C)the current price is above its equilibrium price.
• D)All of the above are correct.

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Definitions:

Perfectly Inelastic

A situation where the demand for a product does not change in response to a change in price.

Excise Tax

A tax levied on specific goods, services, or transactions, often based on quantity purchased rather than value, such as taxes on cigarettes, alcohol, and fuel.

Excise Tax

A tax imposed on specific goods or services at purchase such as gasoline, tobacco, and alcohol.

Highly Inelastic

Describes a situation where the demand or supply for a good or service is hardly affected when the price changes.