Effect of excess supply and demand

Excess Supply When market in equilibrium price, the supply is bigger than demand, excess supply occur, when the stock increase, price will go down. Excess DemandWhen market in equilibrium price, the demand is bigger than demand, excess demand occur, when the stock decrease, price will bit up.

Simple but good r~

good, can explain the effect in a simple form , but the other answer explain the reasons behind... (not only the effect! i will choose the other answer as my best answer...)

With excess supply, that means there is a situation that at current price level, quantity consumers are willing to buy is less than quantity producers are willing to produce --> causing the price to decrease so that quantity consumers are willing to buy rises (by law of demand) and quantity producers are willing to sell falls (by law of supply) --> price decreases until Qd = Qs

With excess demand, that means there is a situation that at current price level, quantity consumers are willing to buy is greater than quantity producers are willing to produce --> causing the price to increase so that quantity consumers are willing to buy falls (by law of demand) and quantity producers are willing to sell rises (by law of supply) --> price increases until Qd = Qs


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