If, for a Product, the Quantity Supplied Exceeds the Quantity

question 201

Multiple Choice

If, for a product, 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:

Merchandise Inventory

Merchandise inventory includes goods that a company intends to sell in the ordinary course of business, calculated at the cost of acquiring the goods.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Service Company

A business that provides intangible products or services to customers rather than physical goods.

Operating Cycle

The period it takes for a business to buy inventory, sell products, and generate cash from operations.