In the short-run, if there is a surplus in the market for a product, the rationing function of price can be expected to cause:

A. an increasing shift in the demand for the product.
B. a decreasing shift in the supply of the product.
C. an increase in the market price of the product.
D. a decrease in the market price of the product.

Option D

In the short-run, if there is a surplus in the market for a product, the rationing function of price can be expected to cause:  a decrease in the market price of the product.

When quantity provided surpasses quantity required, a surplus endures.  If the value goes up, the amount of necessitated goes downward. If the price drops, the quantity required raises. Price ceilings limit a price from growing beyond a particular level.

When a price ceiling is fixed under the equilibrium price, the amount required will pass quantity fulfilled, and excess demand or deficits will result. Price floors block a price from dropping below a reliable level. When a price floor is fixed beyond the equilibrium price, the measure supplied will exceed the quantity needed, and excess stock or surpluses will happen.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.