5
QuizMultiple Choice

Entrepreneurship — Unit test

Question 5 • IL-Economics

When supply is higher than demand, prices will

Answer
A
rise until the demand falls.
B
rise until the supply falls.
C
fall until the demand rises.
D
fall until the supply rises.

Explanation

When supply is greater than demand, there is a surplus: sellers have more goods than buyers want at the current price. Sellers lower prices to attract buyers, and the lower price causes quantity demanded to rise. This continues until the surplus is reduced, so the correct choice is “fall until the demand rises.”

AI-written and checked against the verified answer.

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