What occurs when the market price is above the equilibrium price?ShortageSurplusNo changeDemand shifts to the left

When the market price is above the equilibrium price, a surplus occurs.

Explanation:

1. Equilibrium Price: This is the price at which the quantity of a good supplied equals the quantity demanded.
2. Market Price Above Equilibrium: When the market price rises above this level, producers supply more of the good than consumers are willing to purchase at that higher price.
3. Consequences: As a result, there will be excess supply, leading to a surplus in the market. Producers may respond by lowering prices to clear the excess inventory, pushing the market back towards equilibrium.

Final Answer:

Surplus occurs when the market price is above the equilibrium price.