Which of the following is the correct sequence of events when a free and competitive market is in a surplus situation?
Which of the following is the correct sequence of events when a free and competitive market is in a surplus situation?
(a) The market price will increase, which will lead to an increase in Qs and a decrease in Qd until the market reaches another equilibrium position where Qs=Qd.
(b) The market price will increase, which will lead to a decrease in Qs and an increase in Qd until the market reaches another equilibrium position where Qs=Qd.
(c) The market price will decrease, which will lead to an increase in Qs and a decrease in Qd until the market reaches another equilibrium position where Qs=Qd.
(d) . The market price will decrease, which will lead to a decrease in Qs and an increase in Qd until the market reaches another equilibrium position where Qs=Qd.
