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From course:

Economics A Level

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Question:

How, using Market Forces, can Excess Supply be extinguished?

Author: go kys



Answer:

-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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go kys
go kys