Question

If the price level is above the equilibrium price level, how does the aggregate quantity of goods and services demanded compare to the aggregate quantity of goods and services supplied at the price level?

Answer 1

When price is above the equilibrium price level, quantity demanded would be less than the quantity supplied. This would lead to a surplus

Step-by-step explanation:

Equilibrium price is the price at which quantity demand equal quantity supplied.

Above equilibrium price there is a surplus - quantity supplied exceeds quantity demanded. As a result of the surplus, price would fall until equilibrium is reached.

Below equilibrium price there is a shortage - quantity demanded exceeds quantity supplied. As a result of the shortage, price would rise until equilibrium is reached.