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

see EQUILIBRIUM MARKET PRICE.
Excess demandclick for a larger image
Fig. 64 Excess demand.

excess demand

or

shortages

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.

EXCESS SUPPLY, PRICE CONTROLS.

References in periodicals archive ?
Where [epsilon] and [eta] are, respectively, the production adjustment velocities and the interest rate vis-a-vis excess demand in the goods market and the money market.
The excess demand arises as a result of several factors, including demographic conditions, increased industrialisation of developing countries and improving standard of living on a global scale.
Farooqui said that the total value of the bids was ` 52,689 crore, of which ` 30,754 crore came for 2G spectrum in the 1,800 MHz band and excess demand for 1,800 MHz was seen in five circles which include Assam, J& K, UP, MP and Gujarat.
A first building block for a disequilibrium model of a European team sports league comprises a labor market for talent in excess demand (3).
REstore's Demand Response allows energy suppliers and transmission grid operators to look to energy users, such as ACS&T, to relieve the energy market and the grid of excess demand at critical times.
According to an EU study, the labour market could face an excess demand of 384,000 IT practitioners by 2015.
This line of reasoning argues that the failure of the Fed to satisfy the excess demand for money, i.
Domestic consumption has been growing very fast as a result of rapid demographics, steady economic growth and heavy subsidies, with the latter leading to excess demand," said Ali Aissaooui, head of economic research at Arab Petroleum Investments Corporation in Saudi Arabia.
The company also intends to grant the underwriters an option to buy additional shares to cover excess demand.
Fed not to blame for excess demand in emerging nations: Bernanke
BERKELEY: The central insight of macroeconomics is a fact that was known to John Stuart Mill in the first third of the nineteenth century: there can be a large gap between supply and demand for pretty much all currently produced goods and services and types of labor if there is an equally large excess demand for financial assets.
2 million additional shares to cover excess demand for the IPO.