SEARCH
You are in browse mode. You must login to use MEMORY

   Log in to start


From course:

Economics A Level (DONEEEEEEE)

» Start this Course
(Practice similar questions for free)
Question:

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

Author: eric_galvao



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.


0 / 5  (0 ratings)

1 answer(s) in total