Answer to Question #67522 in Microeconomics for fifi

Question

Discuss what is meant by an excess supply in a market. In this case, briefly discuss how price adjusts to clear the market

Answer 1

Excess supply or economic surplus is a situation in which the quantity of a good or service supplied is more than the quantity demanded, and the price is above the equilibrium level determined by supply and demand. That is, the quantity of the product that producers wish to sell exceeds the quantity that potential buyers are willing to buy at the prevailing price. It is the opposite of an economic shortage (excess demand).
Reference:
https://en.wikipedia.org/wiki/Excess_supply