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Excess demand is a situation when
- a)Market demand is equal to market supply
- b)individual demand is greater than individual supply
- c)Market demand is greater than market supply
- d)Market demand is less than market supply
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
Excess demand is a situation whena)Market demand is equal to market su...
Explanation:
Excess demand is a situation that occurs when the market demand for a product or service exceeds the market supply. In this situation, there are more buyers willing and able to purchase a good or service than there are available units of that good or service.
Key Points:
- Excess demand occurs when the market demand exceeds the market supply.
- Market demand refers to the total quantity of a good or service that all buyers are willing and able to purchase at a given price.
- Market supply refers to the total quantity of a good or service that all sellers are willing and able to produce and offer for sale at a given price.
- Excess demand can lead to a shortage of the product, as there are not enough units available to satisfy all the buyers.
- When there is excess demand, buyers may compete with each other to purchase the limited supply, which can drive up the price of the product.
- Excess demand is an indicator of a seller's market, where sellers have more bargaining power and can potentially increase prices.
- In order to eliminate excess demand and restore equilibrium, either the market supply needs to increase or the market demand needs to decrease.
- Excess demand can be temporary or long-term, depending on the factors influencing supply and demand for the product or service.
View all questions of this test
Excess demand is a situation that occurs when the market demand for a product or service exceeds the market supply. In this situation, there are more buyers willing and able to purchase a good or service than there are available units of that good or service.
Key Points:
- Excess demand occurs when the market demand exceeds the market supply.
- Market demand refers to the total quantity of a good or service that all buyers are willing and able to purchase at a given price.
- Market supply refers to the total quantity of a good or service that all sellers are willing and able to produce and offer for sale at a given price.
- Excess demand can lead to a shortage of the product, as there are not enough units available to satisfy all the buyers.
- When there is excess demand, buyers may compete with each other to purchase the limited supply, which can drive up the price of the product.
- Excess demand is an indicator of a seller's market, where sellers have more bargaining power and can potentially increase prices.
- In order to eliminate excess demand and restore equilibrium, either the market supply needs to increase or the market demand needs to decrease.
- Excess demand can be temporary or long-term, depending on the factors influencing supply and demand for the product or service.
Most Upvoted Answer
Excess demand is a situation whena)Market demand is equal to market su...
Excess demand means market demand is greater than market supply
to understand this lets take an example ..
suppose there is high demand of masks in india people are buying masks in large number like 100 masks a day but mask makers are able to make only 80 marks a day soo there is a shortage of supply for mask .
because of this price of mask will increase
HOPE IT HELPS
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Excess demand is a situation whena)Market demand is equal to market supplyb)individual demand is greater than individual supplyc)Market demand is greater than market supplyd)Market demand is less than market supplyCorrect answer is option 'C'. Can you explain this answer?
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