If a Surplus of a Product Currently Exists in the Market

question 52

Multiple Choice

If a surplus of a product currently exists in the market,

• A) the market price is too low.
• B) the quantity demanded exceeds the quantity supplied at the current price.
• C) the quantity supplied exceeds the quantity demanded at the current price.
• D) there is a shortage of the product.
• E) there will be a tendency for the price to rise.

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Definitions:

Buying

The action of acquiring ownership in a security or other financial asset in the hope of generating a gain.

Selling

The process of parting with goods or services in exchange for money or other compensation.

Hedge Strategy

Investment strategies intended to reduce potential losses that may be incurred from adverse price movements in assets.

Short Oil Futures

A speculative strategy involving the sale of oil futures contracts in anticipation of oil prices falling, intending to buy back at a lower price.