Question

what typically happens in a market with a surplus of goods?
○ prices increase to match the excess supply.
○ prices remain stable, but consumers buy more.
○ suppliers lower prices to clear the excess supply.
○ buyers compete to purchase the limited supply.

Explanation:

• A surplus means supply > demand. To sell excess goods, suppliers lower prices to attract more buyers (increase quantity demanded) and reduce excess.
• "Prices increase..." is wrong (surplus leads to price drops, not rises).
• "Prices remain stable..." is wrong (surplus creates pressure to adjust prices).
• "Buyers compete..." describes a shortage (limited supply), not surplus.

Answer:

C. Suppliers lower prices to clear the excess supply.