What is an example of excess supply

Excess supply in a perfectly competitive market is the "extra" amount of supply, beyond the quantity demanded. As an example, suppose the price of a television is $600, the quantity supplied at that price is 1000 televisions, and the quantity demanded is 300 televisions.

What is an example of excess demand?

Excess demand is demand minus supply. Example 1. A baker posts a sale price of $2 per loaf of bread. At this price, he is willing to sell up to 300 loaves of bread (per day), but consumers are willing to buy only 200.

What means excess supply?

Economists call this situation an excess supply – that is the quantity demanded is less than the quantity supplied at the given price. This is also called a surplus. So, if the price is too high, sellers will have leftover chickens.

How do you show excess supply?

You can show excess supply on a graph as the horizontal distance between the demand and the supply curves at a price above the equilibrium price. Looking at the graph below, notice that the current market price, P₂, is above the equilibrium price, P*.