In three to four sentences, explain if there is excess supply or demand of goods at the equilibrium price and why.

An excess in supply happens when the price of a good/service is higher than the equilibrium price while an excess in demand happens when the price of a good/service is lower than the equilibrium price. When it comes to excess in supply, the high price of goods/services attracts the sellers to produce more goods so they can gain more profit. On the other hand, when it comes to excess in demand, the low price of goods/services attracts the buyers to purchase more.

pybrothepyro4 pybrothepyro4 · Answer 2 · 2022-05-25T03:18:30+02:00

Answer:

When the price of a good/service is higher than the equilibrium price, an excess of supply occurs, whereas when the price of a good/service is lower than the equilibrium price, an excess of demand occurs. When it comes to surplus supply, the high price of goods/services encourages sellers to produce more goods in order to increase their profit margins. When there is an excess of demand, on the other hand, the low price of goods/services encourages purchasers to buy more.

Explanation:

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