What term describes the position where supply is greater than demand at a given price and there are unsold goods in the market?

What term describes the position where supply is greater than demand at a given price and there are unsold goods in the market?

• A. Excess supply
• B. Shortage
• C. Equilibrium
• D. Market disequilibrium

Answer: (A)

Excess supply describes a situation where producers are willing to supply more of a good at the current price than buyers are willing to buy. There are unsold goods in the market because quantity supplied exceeds quantity demanded. This often pushes prices down as sellers lower prices to clear the surplus. It’s the opposite of a shortage, where demand exceeds supply, and it’s different from equilibrium, where supply equals demand. Market disequilibrium just means the market isn’t balanced; excess supply is a specific type of disequilibrium.

Excess supply describes a situation where producers are willing to supply more of a good at the current price than buyers are willing to buy. There are unsold goods in the market because quantity supplied exceeds quantity demanded. This often pushes prices down as sellers lower prices to clear the surplus. It’s the opposite of a shortage, where demand exceeds supply, and it’s different from equilibrium, where supply equals demand. Market disequilibrium just means the market isn’t balanced; excess supply is a specific type of disequilibrium.