Question

As long as the actual market price exceeds the equilibrium market price, there will be:

a. Downward pressure on the market price
b. Upward pressure on the market price
c. No purchases made
d. Both A and C are correct
e. Both B and C are correct

Answer 1

Answer:

The answer is a. Downward pressure on the market price

Explanation:

As the market price is set above the equilibrium price, this is a lower demand level comparatively to a higher supply level (draw it and you'll see it!)

So this level.of price is not a sustainable level both for the demanders and the suppliers. Because of that, naturally there is a downward pressure on price to go down.