Excess supply is created when price or move away from the equilibrium point.

Answer

Excess supply is created when price or quantity move away from the equilibrium point.

Explanation: When the market price is high than the equilibrium price, the quantity supplied is higher than the quantity in demand, it will create a surplus and market price will fall.

When the market price is less than the equilibrium price, the quantity supplied is less than quantity demanded and creates a shortage. Now, the market is not clear. Market price will go up because of shortage.

Normally for any good, quantity supplied is equal to quantity demanded at a set price. If buyers are more than sellers at a certain price, the price will go up until some of the buyers are not interested, or some people who already not considered that they want to sell goods. This process continues until the buyers and sellers become equal which should happen at the equilibrium point.

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