Surplus Answers
Definition: Surplus is the excess of a good when the quantity supplied is greater than the quantity demand; surpluses occur when the price is above the equilibrium price.
Example: There is a surplus of butter in Europe because of government regulations on the price of butter.
1. False. It will only cause a surplus if it is above equilibrium.
2. A surplus is caused by an excess of Supply.
3. There is no surplus. In fact, there is a shortage.
Definition: Surplus is the excess of a good when the quantity supplied is greater than the quantity demand; surpluses occur when the price is above the equilibrium price.
Example: There is a surplus of butter in Europe because of government regulations on the price of butter.
1. False. It will only cause a surplus if it is above equilibrium.
2. A surplus is caused by an excess of Supply.
3. There is no surplus. In fact, there is a shortage.