Question

A situation in which the quantity of bonds supplied exceeds the quantity of bonds demanded is called a condition of excess supply; because people want to sell ________ bonds than others want to buy, the price of bonds will ________.

A) fewer; fall
B) fewer; rise
C) more; fall
D) more; rise

Answer 1

Answer: Option (C)

Step-by-step explanation:

Excess supply is referred to as or known as the market condition under which the quantity supplied tends to greater than demand for a product, commodity or a service at the current market price. It mostly tends to occur at the price which is greater than equilibrium price level. The price tends to be greater than that of equilibrium price therefore sellers would moreover sense this situation as an opportunity in order to earn the greater profits and thus would pump in supply.