Question

In a market with an upward sloping supply curve and a downward sloping demand curve, when the actual price must be higher than the equilibrium price, there will be:

Answer 1

Answer:

excess supply

Explanation:

If price is higher than equilibrium price, quantity demanded would fall while quantity supplied would increase. This is in line with the law of demand and supply

according to the law of supply, the higher the price, the higher the quantity supplied and the lower the price, the lower the quantity supplied.

According to the law of demand, the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.

This accounts for why the supply curve is positively sloped.