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What happens when the quantity of a good supplied at a given price is greater than the quantity demanded?

A. Excess supply
B. Stable prices
C. Exact equilibrium
D. Increased production


Sagot :

Final answer:

Excess supply (or surplus) happens when the quantity supplied exceeds the quantity demanded, resulting in a decrease in price until equilibrium is reached.


Explanation:

Excess supply, also known as a surplus, occurs when the quantity supplied of a good is greater than the quantity demanded at the current price. This situation leads to a decrease in price until equilibrium is reached. Stable prices are not characteristic of a scenario where excess supply exists. Increased production may be a result of the surplus being eliminated to restore equilibrium.


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