1.

What will happen if the price prevailing in the market is: (i) above the equilibrium price? (ii) below the equilibrium price?

Answer»

Solution :(i) If the market PRICE is above the equilibrium price, then there will be a SITUATION of Excess SUPPLY in the market.
(II) If the market price is below the equilibrium price, then there will be a situation of Excess Demand in the market.


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