Giving reasons, state whether the following statement are true or false :
(i) Excess supply of a commodity exists when its market price is greater than equilibirum price.

Answer

True, because at a price higher than equilibrium price demand falls while supply rises. This creates excess supply.

Explanation

TRUE. If the market supply is greater than the equilibrium price there will be excess supply since producers will now be incentivized by the higher profits caused by higher prices.