<p>Let’s take it one by one:</p>
<ol>
<li>Increase in the number of suppliers of the product</li>
</ol>
<p>This would not lead to long-run surplus because increase in supply, ceteris paribus, would result in drop in price so the equilibrium quantity would increase and market would clear.  Lower price would give people incentive to consume more and firms to produce less until quantity demanded equals quantity supplied.</p>
<p>In short run there could be surplus before market reaches the equilibrium but not in long run.</p>
<ol start="2">
<li>Increase in price is set by law above the equilibrium price</li>
</ol>
<p>This is indeed a correct answer because if price is fixed about equilibrium level firms will want to produce more than consumers are willing to consume. This is visualized below on a picture from <a href="https://images.app.goo.gl/PGAZfsRz1zcvvxit6" rel="nofollow noreferrer">Khan Academy</a>.</p>
<p><a href="https://i.sstatic.net/RAZSi.jpg" rel="nofollow noreferrer"><img src="https://i.sstatic.net/RAZSi.jpg" alt="enter image description here" /></a></p>
<ol start="3">
<li>Increase in the demand for the product.</li>
</ol>
<p>There is no reason why this should lead to surplus at all. In fact this could lead to temporary shortage on market but in a long run equilibrium price would increase and market would clear (that is quantity demanded would be equal to quantity supplied) since higher price would compel producers to produce more and consumers to consume less.</p>
<ol start="4">
<li>Increase in costs of resources used to produce the product.</li>
</ol>
<p>Again this could lead to temporary shortage. If costs of production increase its more difficult to produce products. So if anything this would lead to shortage not surplus. In a long run this would shift supply to the left. Ceteris paribus price would increase and thus again equilibrium where there is no shortage or surplus would be reached.</p>
<ol start="5">
<li>Increase in the future expected price of the product.</li>
</ol>
<p>This could actually again lead to temporary shortage. If people expect price will be higher tomorrow, then they will try to buy as much now as possible. On other hand firms will try to sell more products tomorrow than today.</p>
<p>Furthermore, assuming price is free to fluctuate again there is no reason to suspect there should be surplus on the market in the long run. It is definitely not more likely than in scenario 2.</p>

CC BY-SA 4.0
2022-03-18T23:38:42.097Z
Thank you for the great and detailed answer. Just a quick small question, in answer  five, in my understanding, since the producer know the product will increase its price in the future. They will try their best to make as more product as they can, why this won't be true?
James
CC BY-SA 4.0
2022-03-19T08:26:44.243Z
@James because that could only lead to surplus in short run not in long run once market equilibrates
1muflon1
CC BY-SA 4.0
2022-03-13T20:20:28.887Z
2022-03-13T20:27:11.743Z
2022-03-13T20:27:11.743Z
1muflon1
<p>This is a question from AP microeconomy.</p>
<p>An increase in which of the following will most likely result in a long-run surplus of a product?</p>
<ol>
<li>The number of suppliers of the product</li>
<li>A price is set by law above the equilibrium price</li>
<li>The demand for the product</li>
<li>The costs of resources used to produce the product</li>
<li>The future expected price of the product</li>
</ol>
<p>The correct answer is B(A price is set by law above the equilibrium price), but I am kind confused why the answer 2 is correct, it seems all make sense to me.</p>
<p>When doing this kind of question, how could we know which is <code>most likely</code> answer?</p>

CC BY-SA 4.0
2022-03-13T20:05:32.753Z
Both of which answers make more sense?
1muflon1
CC BY-SA 4.0
2022-03-13T20:11:21.930Z
@1muflon1, a grammar mistakes, fixed it, I feel like all of them are correct and make sense to me, so I don't know which answer to choose
James
CC BY-SA 4.0
2022-03-16T09:38:26.100Z
Looks like a homework problem. Consult the following topic: https://economics.meta.stackexchange.com/questions/1465/economics-se-policy-on-homework-questions
You can "demonstrate some evidence of having attempted to answer the question independently" by explaining why you believe that each answer could be correct.
Wecon
<microeconomics>
An increase in which of the following will most likely result in a long-run surplus of a product?
James
# An increase in which of the following will most likely result in a long-run surplus of a product?

(Asked by: username_0 on 2022-03-13)

This is a question from AP microeconomy.

An increase in which of the following will most likely result in a long-run surplus of a product?

1. The number of suppliers of the product
2. A price is set by law above the equilibrium price
3. The demand for the product
4. The costs of resources used to produce the product
5. The future expected price of the product

The correct answer is B(A price is set by law above the equilibrium price), but I am kind confused why the answer 2 is correct, it seems all make sense to me.

When doing this kind of question, how could we know which is `most likely` answer?

**Tags:** microeconomics

> **Comments:**
> **username_1**: Both of which answers make more sense?  
> **username_0**: @username_1, a grammar mistakes, fixed it, I feel like all of them are correct and make sense to me, so I don't know which answer to choose  
> **username_2**: Looks like a homework problem. Consult the following topic: https://economics.meta.stackexchange.com/questions/1465/economics-se-policy-on-homework-questions You can "demonstrate some evidence of having attempted to answer the question independently" by explaining why you believe that each answer could be correct.  

---

## 1 answers

### Answer by username_1 on 2022-03-13. Score: 2 | Accepted answer

Let’s take it one by one:

1. Increase in the number of suppliers of the product

This would not lead to long-run surplus because increase in supply, ceteris paribus, would result in drop in price so the equilibrium quantity would increase and market would clear. Lower price would give people incentive to consume more and firms to produce less until quantity demanded equals quantity supplied.

In short run there could be surplus before market reaches the equilibrium but not in long run.

2. Increase in price is set by law above the equilibrium price

This is indeed a correct answer because if price is fixed about equilibrium level firms will want to produce more than consumers are willing to consume. This is visualized below on a picture from [Khan Academy](https://images.app.goo.gl/PGAZfsRz1zcvvxit6).

[![enter image description here](https://i.sstatic.net/RAZSi.jpg)](https://i.sstatic.net/RAZSi.jpg)

3. Increase in the demand for the product.

There is no reason why this should lead to surplus at all. In fact this could lead to temporary shortage on market but in a long run equilibrium price would increase and market would clear (that is quantity demanded would be equal to quantity supplied) since higher price would compel producers to produce more and consumers to consume less.

4. Increase in costs of resources used to produce the product.

Again this could lead to temporary shortage. If costs of production increase its more difficult to produce products. So if anything this would lead to shortage not surplus. In a long run this would shift supply to the left. Ceteris paribus price would increase and thus again equilibrium where there is no shortage or surplus would be reached.

5. Increase in the future expected price of the product.

This could actually again lead to temporary shortage. If people expect price will be higher tomorrow, then they will try to buy as much now as possible. On other hand firms will try to sell more products tomorrow than today.

Furthermore, assuming price is free to fluctuate again there is no reason to suspect there should be surplus on the market in the long run. It is definitely not more likely than in scenario 2.

> **Comments:**
> **username_0**: Thank you for the great and detailed answer. Just a quick small question, in answer  five, in my understanding, since the producer know the product will increase its price in the future. They will try their best to make as more product as they can, why this won't be true?  
> **username_1**: @username_0 because that could only lead to surplus in short run not in long run once market equilibrates  

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