Setting the price higher than equilibrium, like at $4, would lead to a surplus of goods in the market.
If the price is set higher than equilibrium, specifically at $4, it would create a situation of a surplus. Equilibrium is the point where the demand (D) and supply (S) curves intersect, and at this point, the quantity demanded equals the quantity supplied.
However, setting the price above equilibrium disrupts this balance. At a price of $4, the quantity supplied (as per the supply curve) exceeds the quantity demanded (as per the demand curve), resulting in a surplus of goods in the market.
This surplus indicates an excess of supply that is not being consumed by the market, leading to potential issues such as overstocked inventories and downward pressure on prices.