the figure above shows the market for a certain type of backpack. assume that the market price is $31. which…

the figure above shows the market for a certain type of backpack. assume that the market price is $31. which of the following is true? there will be a surplus that will cause the price to decrease; demand will then increase and supply will decrease until the price equals $25. there is a surplus that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25. there is a surplus that will cause the price to decrease; quantity supplied will then increase and quantity demanded will decrease until the price equals $25. there is a surplus that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25.

the figure above shows the market for a certain type of backpack. assume that the market price is $31. which of the following is true? there will be a surplus that will cause the price to decrease; demand will then increase and supply will decrease until the price equals $25. there is a surplus that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25. there is a surplus that will cause the price to decrease; quantity supplied will then increase and quantity demanded will decrease until the price equals $25. there is a surplus that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25.

Answer

Brief Explanations:

In a market with a surplus (quantity supplied > quantity demanded), suppliers will have excess inventory. To sell this inventory, they will lower prices. As prices decrease, quantity demanded increases and quantity supplied decreases according to the laws of demand and supply until equilibrium (where quantity demanded equals quantity supplied) is reached. Here, the equilibrium price is assumed to be $25 and with a market - price of $31 (causing a surplus), the price will decrease until it reaches $25.

Answer:

There is a surplus that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25.