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ANNUITY: The receipt of payments at regular intervals from a established fund. Annuities are commonly used for insurance and retirement programs. It works in this way: A fund, which can be established either through a one-time sum of money or a series of payments, is exhausted over time with fixed, periodic payments. The amount of each payment depends on the interest accrued on the outstanding balance in the fund, and the length of time scheduled to exhaust the fund. For example, if your pension plan is based on an annuity that begins payments at the age of 65, then the size of the payments depends on whether you expect to live 5, 10, 15, or more years and set up payments accordingly. It's very similar to amortization, but in the reverse direction.
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                           EXCESS DEMAND: A disequilibrium condition in a competitive market in which the quantity demanded is greater than the quantity supplied. Excess demand is another way to say shortage. It also goes by the common term of sellers' market. Excess demand is one of two disequilibrium states of the market. The other is excess supply (or surplus). Excess demand emerges in a market when the quantity demanded by the buyers exceeds the quantity supplied by the sellers... at a given market price. Buyers are seeking to buy more of the good than sellers are willing to sell, hence there is an "extra" or "excess" amount of demand.| Excess Demand |  |
Excess demand is illustrated using the market for 8-track tapes displayed in this exhibit. This graph was generated with data from the 88th Annual Trackmania 8-Track Tape Collectors Convention at the Shady Valley Exposition Center.The excess demand for 8-track tapes is indicated as the difference between the quantity demanded and the quantity supplied at a specific market price. In particular, at a 30-cent price, the quantity demanded is 600 tapes and the quantity supplied is 200 tapes. Buyers are willing and able to purchase 400 tapes more than sellers are willing and able to sell. Hence this market has an excess demand of 400 tapes. The result of this excess demand is an increase in the market price. Because buyers are unable to buy as much of the good as they want, they are inclined to bid up the price. Of course, as the price rises, the quantity supplied increases and the quantity demanded decreases, both acting to reduce the amount of the excess demand. Ultimately the entire excess demand is eliminated and equilibrium is restored.
Recommended Citation:EXCESS DEMAND, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: March 21, 2025].
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Today, you are likely to spend a great deal of time at a garage sale wanting to buy either a rechargeable battery for your cell phone or a T-shirt commemorating the 2000 Olympics. Be on the lookout for defective microphones.
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