Graphically, when supply curve is above the demand curve, there is _____.

equilibrium

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excess demand

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excess supply

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none of these

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Solution

The correct option is C excess supply
Excess supply is a situation where the quantity supplied of a good or service is more than the quantity demanded and its price is more than the equilibrium price determined by demand and supply. Hence, graphically when supply curve is above the demand curve, there is excess supply.

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