Which of the following statements about the interaction of demand and supply is most accurate?
A) At prices below equilibrium,demand exceeds supply.
B) Government intervention is usually needed to achieve market equilibrium.
C) At prices above equilibrium,suppliers produce less than consumers are willing to buy.
D) A surplus of product pushes prices upward.

Question

Quizplus · Accepted Answer

At prices below equilibrium, there is excess demand which means that more consumers want to buy the product than suppliers are willing to sell which creates a shortage. At prices above equilibrium, there is excess supply which means that suppliers are willing to produce more units than the consumers are willing to buy which creates a surplus. Therefore, statement A is the most accurate as it correctly describes the relationship between demand and supply at prices below equilibrium.

Which of the Following Statements About the Interaction of Demand