Question

Excess supply is created when price or
move away from the equilibrium point.

Answer 1

Excess supply is created when the price moves above the equilibrium point. At this higher price level, the quantity supplied exceeds the quantity demanded, leading to a surplus of goods in the market. Conversely, if the price moves below the equilibrium point, it would result in excess demand (a shortage) since more consumers would want to buy the product at the lower price than what is being supplied.

In summary, excess supply occurs when the price is set too high relative to the equilibrium price.