When There Is a Surplus of a Product in a Market

question 74

Multiple Choice

When there is a surplus of a product in a market the:

• A) price will rise.
• B) price must be above the equilibrium price.
• C) producers will expand output and sales will rise.
• D) price must be below the equilibrium price.

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Definitions:

Prototypes

A cognitive representation of a typical member of a category, used to enhance memory and identification by providing examples that epitomize common features within that category.

Representativeness Heuristic

A thinking strategy based on how closely a new object or situation is judged to resemble or match an existing prototype of that object or situation.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method, or decision.

Additive Strategy

A decision-making approach in which each alternative is rated on each of the important factors affecting the decision and the alternative with the highest overall rating is chosen.