Author Question: If the price of a product is above equilibrium, what forces it down? What will be an ideal ... (Read 80 times)

ericka1

  • Hero Member
  • *****
  • Posts: 544
If the price of a product is above equilibrium, what forces it down?
 
  What will be an ideal response?

Question 2

Refer to Table 6-8. What is the most distinctive feature of the supply curve?
 
  A) The supply curve is horizontal. B) The supply curve is upward sloping.
  C) The supply curve is perfectly elastic. D) The supply curve is perfectly inelastic.


epscape

  • Sr. Member
  • ****
  • Posts: 335
Answer to Question 1

When the price is above equilibrium, a surplus occurs. Some producers who are unable to sell the product will have an incentive to offer to sell the product at a lower price. A lower price will simultaneously decrease the quantity supplied and increase the quantity demanded. This downward pressure on price continues until the surplus is eliminated and equilibrium is achieved.

Answer to Question 2

D



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Symptoms of kidney problems include a loss of appetite, back pain (which may be sudden and intense), chills, abdominal pain, fluid retention, nausea, the urge to urinate, vomiting, and fever.

Did you know?

When blood is exposed to air, it clots. Heparin allows the blood to come in direct contact with air without clotting.

Did you know?

In the United States, congenital cytomegalovirus causes one child to become disabled almost every hour. CMV is the leading preventable viral cause of development disability in newborns. These disabilities include hearing or vision loss, and cerebral palsy.

Did you know?

In 2010, opiate painkllers, such as morphine, OxyContin®, and Vicodin®, were tied to almost 60% of drug overdose deaths.

Did you know?

According to the FDA, adverse drug events harmed or killed approximately 1,200,000 people in the United States in the year 2015.

For a complete list of videos, visit our video library