When producers produce more than the equilibrium quantity:
A) resources are wasted producing goods at a higher cost than consumers are willing to pay.
B) the market is operating at an abnormally high level of efficiency.
C) sellers have an incentive to reduce their price.
D) buyers have an incentive to offer a higher price.

Question

Quizplus · Accepted Answer

When producers produce more than the equilibrium quantity, they are producing goods at a higher cost than what consumers are willing to pay, which creates a surplus of products. This surplus leads to wasted resources as the excess goods may not be sold, and producers may have to sell them at a lower price, resulting in losses.

When Producers Produce More Than the Equilibrium Quantity