Question

Give reasons or explain the following statement:  

Supply cannot exceed stock. 

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. Whereas, supply refers to the total sales of the goods by the producer. 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, supply cannot exceed stock as the total sales cannot be more than the goods produced or available for sale.