USA HISTORY

Detailed explanation-1: -What Is Oversupply? Oversupply is an excessive amount of a product that is the result of when demand is lower than supply, resulting in a surplus.

Detailed explanation-2: -Excess Demand: the quantity demanded is greater than the quantity supplied at the given price. This is also called a shortage.

Detailed explanation-3: -In economics, overproduction, oversupply, excess of supply or glut refers to excess of supply over demand of products being offered to the market. This leads to lower prices and/or unsold goods along with the possibility of unemployment.

Detailed explanation-4: -It’s a fundamental economic principle that when supply exceeds demand for a good or service, prices fall. When demand exceeds supply, prices tend to rise. There is an inverse relationship between the supply and prices of goods and services when demand is unchanged.

Detailed explanation-5: -A good is said to be overproduced when its supply in the market overpasses its demand. Thus, this causes the price of the product to be higher than the equilibrium level. As a result, it can be stated that the marginal social cost of the product is higher than the marginal social benefit.