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Excess supply

Excess supply, also known as surplus, refers to a situation in which the quantity of a good or service that is being offered for sale exceeds the quantity that is being demanded by consumers at the current price. This can lead to a decrease in the price of the good or service, as producers may need to lower the price in order to sell the excess supply.

Excess supply is an important concept in economics and is related to the concept of market equilibrium, which occurs when the quantity of a good or service that is being supplied is equal to the quantity that is being demanded. When there is excess supply, the market is said to be in disequilibrium, and the price of the good or service will tend to adjust in order to bring the market back into equilibrium.

Excess supply can be caused by a variety of factors, including changes in consumer demand, increases in production, or the introduction of new goods or technologies that compete with the existing product.

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