Refer to the following graph to answer the next question. When the price is _______ the equilibrium price, we would expect there to be a ________, causing ________ pressure on the price until it goes back to the equilibrium price.

Question

BlackTom AI · Accepted Answer

At a price above the equilibrium price (for example $40 on the graph), quantity supplied exceeds quantity demanded, creating a surplus that pushes price downward.

1. Relevant concepts
- Market equilibrium occurs where the supply and demand curves intersect (here at P = $30 and Q = 100).
- If price is above equilibrium, Qs > Qd (surplus). If price is below equilibrium, Qd > Qs (shortage).
- Surplus places downward pressure on price (sellers cut price to sell excess), shortage places upward pressure (buyers bid price up).

2. Step-by-step reasoning
- Identify the equilibrium point on the graph: the intersection is at P = $30 and Q = 100.
- Consider a price above equilibrium; the graph shows a horizontal line at P = $40.
- Read off quantities at that price from the dashed vertical lines: at $40, quantity demanded ≈ 50 and quantity supplied ≈ 150.

3. Calculations and intermediate steps
- Qs at $40 = 150 (from supply curve intersection with $40 line).
- Qd at $40 = 50 (from demand curve intersection with $40 line).
- Surplus = Qs − Qd = 150 − 50 = 100 units.

4. Why the correct answer is correct
- Because price ($40) is above the equilibrium ($30), supply (150) exceeds demand (50), producing a surplus of 100 units. Sellers with excess goods reduce prices to increase sales, so the surplus causes downward pressure on price until price returns to the equilibrium where Qs = Qd.

5. Why the other options are incorrect
- (a) above; surplus; upward: incorrect because a surplus causes downward, not upward, pressure.
- (b) below; surplus; upward: incorrect because a price below equilibrium creates a shortage, not a surplus.
- (c) below; shortage; downward: incorrect because a shortage leads to upward pressure on price, not downward.

6. Conclusion
- The correct choice is d. above; surplus; downward, which matches the provided answer.

Refer to the following graph to answer the next question. When the price is _ the equilibrium price, we would expect there to be a , causing __ pressure on the price until it goes back to the equilibrium price.单项选择题

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Refer to the following graph to answer the next question. When the price is _______ the equilibrium price, we would expect there to be a ________, causing ________ pressure on the price until it goes back to the equilibrium price.单项选择题