When There Is an Excess Supply of a Product in an Unregulated

question 282

Multiple Choice

When there is an excess supply of a product in an unregulated market, the tendency is for

• A) price to rise.
• B) price to decrease.
• C) quantity supplied to increase.
• D) quantity demanded to decrease.

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Definitions:

Status Quo Bias

The tendency most people have when making choices to select any option that is presented as the default (status quo) option. Explainable by prospect theory and loss aversion.

Behavioral Economics

A field of economics that examines how psychological, cognitive, emotional, cultural, and social factors affect economic decisions.

Utility

A measure of satisfaction or happiness that a consumer derives from consuming goods or services.

Disutility

The negative utility or dissatisfaction experienced by consumers from consuming a good or engaging in an activity.