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Author Question: If the price of a product is above equilibrium, what forces it down? What will be an ideal ... (Read 78 times)

ericka1

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on: Jun 29, 2018
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.
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epscape

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Reply #1 on: Jun 29, 2018
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


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