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Option 2; As the price of a good surpluses, the surplus of the producer will increase. This is due to the incentive of a producer to sell more products at a higher price to better profit the producer. If the price of good decreases, the surplus of the product will always increase as the price of goods will fall and decrease the market price of the good being sold. The law of demand States that as if the price goes up, the demand goes down, but if the price increases, the quality demand will increase. There was a time where I listed an Xbox on offer up for a higher price than the market value. It was the newest version so high balling the value was my plan to gain more profit. As days went on, I was receiving offers but for a lower price and which I was not interested in. Ultimately, a buyer offered a price that was a little lower in value than what I listed the X Box for, but we were able to negotiate a price. I ended up loosing money which decreased the value, but the buyer gained value of the product, while I made a little less than what I was looking for.