if-the-market-price-of-a-product-is-set-above-the-equilibrium-price-what-is-like

Question

If the market price of a product is set above the equilibrium price, what is likely to occur, and how will the market adjust?

Accepted Answer

Excess supply will occur, leading producers to lower prices to reach equilibrium.

Answer

The market will remain stable with no changes in price or quantity.

Answer

Government intervention will be required to adjust the price.

Answer

Excess demand will occur, leading producers to raise prices to reach equilibrium.