When market price is higher than the equilibrium price,a surplus is created.This will put downward pressure on price,causing quantity demanded to increase and quantity supplied to decrease until equilibrium is reestablished.

Question

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When the market price is above the equilibrium price, it means that the quantity supplied exceeds the quantity demanded, creating a surplus. This surplus puts downward pressure on the price, as sellers try to sell their excess inventory, leading to an increase in quantity demanded and a decrease in quantity supplied until the market reaches equilibrium again.

When Market Price Is Higher Than the Equilibrium Price,a Surplus