Question

Give reason or explain:

Stock can exceed supply.

Answer 1

Stock is the total amount of goods that are available with the seller for sale in the market at a given point of time. However, the sellers may or may not be willing to sell the entire available amount. Accordingly, the sellers can take only a part of the stock to sell in the market at the given prices. In other words, we can say that while stock is the total amount of goods available for sale, supply is the part of stock which the sellers are actually willing to sell in the market at the given price. Thus, stock can exceed supply.