Question

When quantity supplied > quantity demanded, and the actual price of a good is higher than the equilibrium price, _____ occurs.
A. a surplus
B. excess demand
C. a shortage
D. a production possibility

Answer 1

When quantity supplied > quantity demanded, and the actual price of a good is higher than the equilibrium price, a surplus occurs.

Answer: Option A

Explanation:

With the increase in the supply of the good compared to the demand of the good, the price of the good at the equilibrium level ( equilibrium level is the level where quantity demanded is equal to the quantity supplied) will be higher than the price which would be at the equilibrium level. This would lead to the increase in the quantity of the goods supplied. Therefore there would be surplus in the quantity of the goods available in the market.