If automobile manufacturers are producing cars faster than people want to buy them,

there is an excess supply and price can be expected to decrease

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there is an excess supply and price can be expected to increase

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there is an excess demand and price can be expected to decrease

No worries! We‘ve got your back. Try BYJU‘S free classes today!

there is an excess demand and price can be expected to increase

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Solution

The correct option is A
there is an excess supply and price can be expected to decrease

If automobile manufacturers are producing cars faster than people want to buy them, there is an excess supply and price can be expected to decrease.

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Similar questions

What happens to equilibrium price of a commodity if there is an 'increase' in its demand and 'decrease' in its supply ?

Consider the following demand and supply functions for a good.

Quantity demanded = 160 - 2p

Quantity supplied = - 40 + 2p

(i) Calculate the equilibrium price and quantity.

(ii) Find out a price at which there is excess demand.

(iii) Find out a price at which there is excess supply.

Suppose the demand and supply curves of a commodity are given as:
$Y^{d} = 200 - p$
$Y^{s} = 120 + p$
(i) Find the equilibrium price and equilibrium quantity.
(ii) Also show that at a price of Rs. 30, there is excess demand and at a price of Rs. 45, there is excess supply.

What happens to equilibrium price of a commodity if there is ‘decrease’ in its demand and ‘increase’ in its supply ?

Q. When supply curve shifts to the right, _________.
A. There is excess supply
B. There is deficient supply
C. Prices tend to fall
D. Prices tend to rise

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If automobile manufacturers are producing cars faster than people want to buy them,

The correct option is A there is an excess supply and price can be expected to decrease If automobile manufacturers are producing cars faster than people want to buy them, there is an excess supply and price can be expected to decrease.

The correct option is A
there is an excess supply and price can be expected to decrease

If automobile manufacturers are producing cars faster than people want to buy them, there is an excess supply and price can be expected to decrease.