If aggregate quantity supplied is greater than aggregate quantity demanded at a particular price level,then a
A) shortage exists and consumers will bid the price level up.
B) surplus exists and consumers will bid the price level up.
C) surplus exists and the price level will decline.
D) shortage exists and the price level will decline.
E) c and d

Question

Quizplus · Accepted Answer

When aggregate quantity supplied is greater than aggregate quantity demanded, a surplus exists, which means there is an excess supply of goods. In this case, sellers will be forced to lower their prices in order to clear their inventory and there will be a downward pressure on the price level. Therefore, option C is the correct answer.

If Aggregate Quantity Supplied Is Greater Than Aggregate Quantity Demanded