Giving reasons, state whether the following statement are true or false : (i) Excess supply of a commodity exists when its market price is greater than equilibirum price.

Giving reasons, state whether the following statement are true or fals

1.	Giving reasons, state whether the following statement are true or false : (i) Excess supply of a commodity exists when its market price is greater than equilibirum price.
Answer» Solution :TRUE. If the market SUPPLY is greater than the equilibrium price there will be excess supply since PRODUCERS will now be incentivized by the HIGHER profits caused by higher PRICES.