ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Excess Demand: the quantity demanded is greater than the quantity supplied at the given price. This is also called a shortage. Excess Supply: the quantity demanded is less than the quantity supplied at the given price. This is also called a surplus.

Detailed explanation-2: -A surplus exists if the quantity of a good or service supplied exceeds the quantity demanded at the current price; it causes downward pressure on price. A shortage exists if the quantity of a good or service demanded exceeds the quantity supplied at the current price; it causes upward pressure on price.

Detailed explanation-3: -The equilibrium occurs where the quantity demanded is equal to the quantity supplied. If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. Excess demand or a shortage will exist.

Detailed explanation-4: -A surplus results from a disconnect between supply and demand for a product, or when some people are willing to pay more for a product than other consumers. Typically, a surplus causes a market disequilibrium in the supply and demand of a product.

Detailed explanation-5: -If the quantity supplied is greater than the quantity demanded, what must happen to the price in order to reach equilibrium? The price of the product will increase to meet equilibrium.