Question

suppose chocolate-dipped strawberries are currently selling for $30 per dozen, but the equilibrium price of chocolate-dipped strawberries is $20 per dozen. we would expect a a. shortage to exist and the market price of chocolate-dipped strawberries to increase. b. shortage to exist and the market price of chocolate-dipped strawberries to decrease. c. surplus to exist and the market price of chocolate-dipped strawberries to increase. d. surplus to exist and the market price of chocolate-dipped strawberries to decrease.

Answer 1

When the price of chocolate-dipped strawberries is above the equilibrium price, it results in a surplus, leading sellers to lower prices to reach equilibrium. Therefore correct option is B

Step-by-step explanation:

If chocolate-dipped strawberries are currently selling for $30 per dozen but the equilibrium price is $20 per dozen, it indicates that the price is above the equilibrium. This condition typically leads to a surplus because producers are willing to supply more at the higher price, while consumers are not willing to buy as much due to the price being too high. Consequently, to eliminate this surplus, producers would lower the market price, so the correct answer is (d) surplus to exist and the market price of chocolate-dipped strawberries to decrease.