How do price adjustments eliminate a surplus?
A) As price rises, quantity demanded decreases and quantity supplied increases.
B) As price rises, quantity demanded increases and quantity supplied decreases.
C) As price falls, quantity demanded decreases and quantity supplied increases.
D) As price falls, quantity demanded increases and quantity supplied decreases.
E) None of the above are true.

Question

Quizplus · Accepted Answer

When there is a surplus, reducing the price makes the product more attractive to buyers, increasing the quantity demanded, while suppliers may produce less due to lower profitability, thus helping to eliminate the surplus.

How Do Price Adjustments Eliminate a Surplus