What will happen if the price prevailing in the market is –
(i) Above the equilibrium price?
(ii) Below the equilibrium price?
If the price prevailing in the market is above the equilibrium price –
Then the demand will be less than the supply, it means a situation of excess supply will be in the market
If the price prevailing in the market is below the equilibrium price –
Then there will be more demand and less supply, it means situation of excess demand or shortage of supply.