Questions: In a market with an upward sloping supply curve and a downward sloping demand curve, when the actual price must be higher than the equilibrium price, there will be Select one: a. excess demand. b. excess supply. c. an increase in the price. d. quantity higher than the equilibrium quantity

The answer is b. excess supply.

Excess demand occurs when the actual price is below the equilibrium price, leading to a situation where the quantity demanded exceeds the quantity supplied. This is not the case when the actual price is higher than the equilibrium price.

Excess supply, also known as a surplus, occurs when the actual price is above the equilibrium price. In this situation, the quantity supplied exceeds the quantity demanded because suppliers are willing to sell more at the higher price, but consumers are not willing to buy as much. This is the correct answer.

An increase in the price would typically occur if there were excess demand, not excess supply. When there is excess supply, the market pressure is usually towards a decrease in price to reach equilibrium.

While the quantity supplied might be higher than the equilibrium quantity due to the higher price, the quantity demanded would be lower, leading to excess supply. Therefore, this option does not accurately describe the situation.