Final answer:
Excess supply (or surplus) happens when the quantity supplied exceeds the quantity demanded, resulting in a decrease in price until equilibrium is reached.
Explanation:
Excess supply, also known as a surplus, occurs when the quantity supplied of a good is greater than the quantity demanded at the current price. This situation leads to a decrease in price until equilibrium is reached. Stable prices are not characteristic of a scenario where excess supply exists. Increased production may be a result of the surplus being eliminated to restore equilibrium.
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