The graph shows excess supply.

A graph titled Excess supply has quantity on the x-axis and price on the y-axis. A line with positive slope represents supply and a line with negative slope represents demand. The lines intersect at the point of equilibrium (p star, Q star). A point on the demand line is (P 2, quantity demanded) and a point on the supply line is (P 2, quantity supplied). Both points are higher than the point of equilibrium.

Which explains why the price indicated by p2 on the graph is higher than the equilibrium price?



As prices rise, quantity demanded goes up.
As prices rise, quantity demanded goes down.
As prices rise, quantity demanded stays the same.
As prices rise, quantity demanded disappears.