Q6 of 15 Page 5

What will happen if the price prevailing in the market is

(i) Above the equilibrium price.


(ii) Below the equilibrium price.


(i) If the price prevailing in the market is above equilibrium price, demand will be less than supply, the situation of excess supply in the market arises.
(ii) If the price prevailing in the market is below the equilibrium price, demand will be more than supply, the situation of excess demand in the market arises.


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