-What Happens as the Result of a Surplus

question 297

Multiple Choice

-What happens as the result of a surplus?

• A) There is downward pressure on prices.
• B) There is upward pressure on prices.
• C) Consumers begin to view the good as an inferior good because it is too commonplace.
• D) Demand for the good increases.

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Definitions:

Money Income

Money Income is the total amount of monetary earnings received by an individual or household, including wages, salaries, benefits, and other income sources, over a specific period of time.

Price

The sum of money that is anticipated, demanded, or paid in exchange for something, representing the value of goods or services in financial terms.

Indifference Curves

represent combinations of two goods that provide the same level of utility or satisfaction to a consumer, illustrating their preferences.

Budget Constraints

The limitations on the consumption bundles that a consumer can afford given their income and the prices of goods and services.