When the market price is above equilibrium price, the market price will be drive
When the market price is above the equilibrium price, it creates a situation called a "surplus" in the market. This means that there is more supply available than there is demand from buyers. As a result, sellers will need to lower the price to incentivize buyers to purchase their products or services. This process of price adjustment is known as market forces.
To understand why the market price will be driven down in this situation, you need to grasp the concept of supply and demand. The equilibrium price is the point where the quantity supplied by sellers matches the quantity demanded by buyers. At this price level, there is neither a surplus nor a shortage in the market. However, if the market price rises above this point, it implies that there is an excess supply available in the market.
To bring the market back into balance, sellers will be motivated to reduce their prices, as they perceive the surplus as a loss in potential sales. This reduction in price will attract more buyers, leading to an increase in demand and a decrease in the surplus. The process will continue until the market price reaches the equilibrium price, at which the quantity supplied and the quantity demanded are once again equal.
In summary, when the market price is above the equilibrium price, market forces will drive it down through a decrease in price as sellers attempt to reduce the surplus and entice buyers to purchase, ultimately bringing the market back to equilibrium.