3. If automobile manufacturers are producing cars faster than people want to buy them,

Question

BlackTom AI · Accepted Answer

When quantity supplied exceeds quantity demanded at the current price, the market has a surplus (excess supply), so sellers must lower price to clear unsold inventory.

1) Relevant knowledge points and concepts
- Law of supply and demand: Price adjusts to equate quantity supplied (Qs) and quantity demanded (Qd).
- Excess supply (surplus): Qs > Qd at the prevailing price.
- Price adjustment mechanism: Surplus creates downward pressure on price; price falls until Qd rises and Qs falls to reach equilibrium.

2) Step-by-step reasoning
- Statement: Manufacturers are producing cars faster than people want to buy them. Translate into quantities: Qs > Qd.
- Identify market condition: That inequality defines an excess supply (surplus).
- Market response: With unsold cars accumulating, dealers and manufacturers have an incentive to reduce price to attract more buyers and reduce inventory.
- New equilibrium: As price falls, quantity demanded increases (movement along demand curve) and quantity supplied decreases (movement along supply curve) until Qs = Qd.

3) Intermediate calculation example
- Suppose at current price: Qs = 1,200 cars, Qd = 1,000 cars → excess supply = 200 cars.
- Price reduction causes Qd to rise to 1,100 and Qs to fall to 1,100 after adjustments; surplus eliminated.

4) Why the correct answer is correct
- Excess supply directly implies downward pressure on price; hence price can be expected to decrease. That matches choice b.

5) Why the other options are incorrect
- a (excess demand and price decrease): Contradiction—excess demand would push price up, not down.
- c (excess demand and price increase): Excess demand raises price, but the scenario describes production faster than purchases (not excess demand).
- d (excess supply and price increase): With a surplus, prices fall, so predicting an increase is wrong.

6) Conclusion
- The correct choice is b. There is an excess supply and price can be expected to decrease. This matches the provided answer.

3. If automobile manufacturers are producing cars faster than people want to buy them,单项选择题

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