Suppose that the equilibrium price in the market is $12. If the current market price is $14:
the quantity demanded in the market will decrease until the current market price falls.
competition among buyers will increase the current market price.
the quantity supplied in the market will rise, driving the current market price up to $14.
the current market price will fall as sellers compete for market share.
If the current market price is $14, which is above the equilibrium price of $12, we can analyze the situation as follows:
The quantity demanded in the market will decrease until the current market price falls. - This statement is true. At a higher price of $14, consumers will demand less of the good compared to the equilibrium price of $12.
Competition among buyers will increase the current market price. - This statement is false. Since the price is already above equilibrium, there is no competition among buyers driving the price up; instead, there is excess supply.
The quantity supplied in the market will rise, driving the current market price up to $14. - This statement is misleading. While it is true that suppliers may increase the quantity supplied at a higher price, the market price is already at $14, and the equilibrium price is $12. The market will not drive the price up further; rather, it will adjust downwards.
The current market price will fall as sellers compete for market share. - This statement is true. Since the price is above equilibrium, sellers will have excess inventory and may lower their prices to attract buyers, leading to a decrease in the current market price.
In summary, the most accurate statements regarding the situation are that the quantity demanded will decrease and the current market price will fall as sellers compete for market