Question

Suppliers recognize there is a surplus in the market for their product when they notice that.
Select one:
a. the quantity demanded exceeds the quantity supplied
b. the quantity demanded is less than quantity supplied
c. inventories are rising
d. b and c
e. a and b

Answer 1

I think its b

Answer 2

we can eliminate c and e I think

Answer 3

B is correct, and C should follow along too if you think about it.

Business inventories are formed when intermediate goods are put for storage and then used later on to make the final product, just to stay in balance with equilibrium quantity. If there are too many business inventories, especially unanticipated, this means that the firm is extracting raw material much greater than the quantity demanded. This leads to inflation essentially.