excess demand

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Excess Demand

Demand for a good or service well over supply. Excess demand leads to high prices for the good or service.

excess demand

Excess demandclick for a larger image
Fig. 64 Excess demand.

excess demand



a situation in which the quantity demanded (see DEMAND) of a product (OQ2 in Fig. 64) exceeds the quantity supplied (see SUPPLY) (OQ1) at the existing market price (OP). In competitive markets there will be an upward pressure on price, reflecting a shortage of the product, but where the price is controlled the excess could persist. See EQUILIBRIUM MARKET PRICE, Fig. 64 Excess demand. See entry.


References in periodicals archive ?
The decrease in demand and increase in bed supply eliminated the excess demand that nursing home experienced historically in many markets (Scanlon 1980; Nyman 1989a).
The other option was to wring out the excess demand before reestablishing a trend increase in demand.
An alternative more usual formulation is that an excess demand for money leads to an increase, in its price in terms of commodities.
Prices greater than this level will result in excess supply; prices below this level result in excess demand.
Ideally, we would like every runner to have a box and if there is excess demand on a regular basis, we would look at providing additional facilities," added Cameron.
Last year, the Fed raised rates a quarter percentage point, citing excess demand in the economy.
Using a proxy for excess demand or tight bed supplies, his analysis revealed lower patient-care expenditures in nursing homes located in underbedded markets.
A significant proportion of the anticipated excess demand for mutton and fresh milk can be eliminated by increasing the rate of credit supply to these sub-sectors.
Such evidence seems to imply an excess demand for college graduates on the part of employers who bid up the wages of college graduates in order to recruit the scarce workers they need.
Continued excess demand for foreign exchange assets in the local market, real appreciation of the bolivar fuerte, and a large fiscal imbalance are likely to lead to an adjustment in the official exchange rate.
There hasn't been excess supply or excess demand in the market, indicating stability has returned" since the measures were introduced on 13 February, said David Adepoju, President of the Financial Markets Dealers Association, the parent organization of the FMDQ.
There is an excess demand for 5 million homes, and Chinese firms are keen on grabbing a share, despite competition is huge.