Question

what happens when supply is greater than demand?
○ consumers stop buying goods
○ prices rise
○ a shortage develops
○ a surplus occurs

Explanation:

To solve this, we analyze each option:

• "Consumers stop buying goods" is incorrect as supply > demand doesn't mean consumers stop buying entirely.
• "Prices rise" is wrong; when supply > demand, prices typically fall (not rise) as sellers compete to sell excess goods.
• "A shortage develops" is incorrect because a shortage is when demand > supply.
• "A surplus occurs" is correct because surplus is defined as when the quantity supplied exceeds the quantity demanded.

Answer:

D. A surplus occurs