When the government sets a price that is above the equilibrium price in a market:

Question

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When the government sets a price that is above the equilibrium price in a market, it creates a situation where the quantity supplied exceeds the quantity demanded, leading to a surplus in the market. This is because producers are willing to supply more goods/services at the higher price, but consumers are not willing to purchase as much at that price.  As a result, there will be excess supply or surplus in the market.

When the Government Sets a Price That Is Above the Equilibrium