Question:
How, using Market Forces, can Excess Supply be extinguished?
Author: eric_galvaoAnswer:
-Excess Supply is when Qs is Higher than Qd. This happens [Assuming Demand and Supply Curves are Normal] when the Price is Set Above the Equilibrium Price -If the Price was Set above, then the Supplied would Outmatch the Demanded, so the Price would be Forced Downwards as the Supplier is Loosing Money. This leads to Equilibrium.
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