If the Quantity Supplied Exceeds the Quantity Demanded, the Market

question 97

Multiple Choice

If the quantity supplied exceeds the quantity demanded, the market price will fall until:

• A)the quantity demanded exceeds the quantity supplied.The market will then be in equilibrium.
• B)quantity demanded equals quantity supplied.The equilibrium price will then be lower than the market price.
• C)all consumers will be able to afford the product.
• D)quantity demanded equals quantity supplied.The market price will then equal the equilibrium price.

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Definitions:

Safety Stock

Extra inventory maintained to guard against stockouts due to variance in supply or demand.

Inventory Level

The quantity of goods and materials on hand and available for sale or use by a business at any given time.

Inventory Carrying Costs

Inventory carrying costs refer to the total expenses associated with holding and storing unsold goods, including warehousing, insurance, depreciation, and opportunity costs.

Fiscal Policy

Government policies related to taxation and spending aimed at influencing a country's economy.