When a surplus exists for a product,
A)Producers increase supply.
B)Consumers increase demand.
C)Government purchases decrease.
D)Producers reduce the level of output and reduce price.

Question

Quizplus · Accepted Answer

When a surplus exists, it means that the quantity supplied exceeds the quantity demanded at the current price. Producers typically respond by reducing the level of output and lowering the price to increase demand and bring the market back to equilibrium.

When a Surplus Exists for a Product