ECONOMICS
MARKETS AND PRICES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
surplus
|
|
|
shortage
|
|
|
price floor
|
|
|
price ceiling
|
Detailed explanation-1: -Answer and Explanation: A surplus is a situation where the quantity supplied is greater than the quantity demanded of a commodity. The situation of surplus occurs when the price level is above the equilibrium price.
Detailed explanation-2: -Economists call this situation an “excess supply” – that is the quantity demanded is less than the quantity supplied at the given price. This is also called a surplus.
Detailed explanation-3: -A surplus will occur if the quantity supplied is higher than the quantity demanded. On the other hand, a shortage occurs when the demand for the product is higher than what has been supplied.
Detailed explanation-4: -In fact, at any above-equilibrium price, the quantity supplied exceeds the quantity demanded. We call this an excess supply or a surplus.
Detailed explanation-5: -A Market Surplus occurs when there is excess supply-that is quantity supplied is greater than quantity demanded. In this situation, some producers won’t be able to sell all their goods. This will induce them to lower their price to make their product more appealing.