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If there is a surplus of a product in the market, what is likely to happen to it

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Question: If there is a surplus of a product in the market, what is likely to happen to its price?

Options:

  1. Price will increase
  2. Price will decrease
  3. Price will remain the same
  4. Price will become volatile

Correct Answer: Price will decrease

Solution: 

In the case of a surplus, suppliers will lower the price to encourage more sales, leading to a decrease in price.

If there is a surplus of a product in the market, what is likely to happen to it

Practice Questions

Q1
If there is a surplus of a product in the market, what is likely to happen to its price?
  1. Price will increase
  2. Price will decrease
  3. Price will remain the same
  4. Price will become volatile

Questions & Step-by-Step Solutions

If there is a surplus of a product in the market, what is likely to happen to its price?
  • Market Surplus – A situation where the quantity supplied of a product exceeds the quantity demanded at a given price.
  • Price Adjustment Mechanism – The process by which prices change in response to surpluses or shortages in the market.
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