In a market economy, the short-run reaction to an excess supply of a commodity after a decrease in demand is that the price will:

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If there is an excess supply of a commodity due to a decrease in demand, the market price is likely to fall in the short run. This is because there is now more supply than demand, and sellers will have to lower their prices to encourage buyers to purchase their product. However, since the market price is lower, profits will also fall for the sellers who cannot sell all of their excess supply.

In a Market Economy, the Short-Run Reaction to an Excess