Excess demand occurs when

Name: Excess demand occurs when
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Question

Quizplus · Accepted Answer

Excess demand occurs when the actual price is less than the equilibrium price, causing a shortage in the market. This means that the quantity demanded exceeds the quantity supplied at the given price level, resulting in buyers competing for a limited number of goods. As a result, the market price will increase until the excess demand is eliminated and the market reaches equilibrium again.

Excess Demand Occurs When