What happens when a product’s price is set above its equilibrium price?

When a product's price is set above its equilibrium price, the quantity supplied exceeds the quantity demanded, leading to a surplus. Equilibrium price is where the quantity of the product that consumers are willing and able to buy matches the quantity that producers are willing to sell.

When prices rise above this equilibrium level, suppliers are incentivized to produce more of the product, as they can receive a higher price. However, at the same time, consumers are less willing to purchase the product due to its higher cost, leading to a decrease in demand. The resulting imbalance creates a surplus, meaning there is excess supply that cannot be sold at the higher price.

Therefore, the correct answer illustrates the consequence of pricing above the equilibrium, resulting in a surplus in the market.