A surplus exists in a market if a

Economics Dec 13, 2020

A surplus exists in a market if

a. there is an excess demand for the good.

b. quantity demanded exceeds quantity supplied.

c. the current price is above its equilibrium price.

d. All of the above are correct.

Expert Solution

A surplus exists in a market if c. the current price is above its equilibrium price.

A market experiencing a surplus has more quantity supplied than quantity demanded. Here, what were supplied by the producers are more than the demand by the consumers. Therefore, there is an excess supply for the good. Also, the current price at surplus is greater than the equilibrium price.

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