Question

question 1 (multiple choice worth 4 points) (lc)
which statement describes a surplus in a market?

• quantity demanded is lower than quantity supplied.
• quantity demanded is higher than quantity supplied.
• quantity demanded is equivalent to quantity supplied.
• quantity demanded is not affected by quantity supplied.

Explanation:

A market surplus occurs when the amount of a good or service that producers are willing to supply (quantity supplied) is greater than the amount that consumers are willing to buy (quantity demanded). So we analyze each option:

• The first option says quantity demanded is lower than quantity supplied, which matches the definition of a surplus.
• The second option describes a shortage (quantity demanded > quantity supplied).
• The third option is market equilibrium (quantity demanded = quantity supplied).
• The fourth option is incorrect as quantity demanded and supplied are related in market dynamics.

Answer:

A. Quantity demanded is lower than quantity supplied.