Excess supply over demand will place a price advantage on _____
Answer Details
This is because, according to the concept of equilibrium, if supply
increases while demand remains constant, there will be an excess of
supply over demand. This will bring about a decrease in the equilibrium
price of the commodity and an increase in the equilibrium quantity. This
gave rise to the fifth law of demand and supply which states that: “an
increase in the supply of a commodity will cause the equilibrium price
to fall and the quantity demanded to increase, while a decrease in
supply will cause the equilibrium price to rise but the quantity
demanded will fall”.