|
|
NEED: This is often thought of as a physiological or biological requirement for maintaining life, such as the need for air, water, food, shelter, and sleep. Satisfaction is achieved by fulfilling needs. Physiological needs should be contrasted with psychological wants that make life more enjoyable but are not necessary to stay alive. However, when push comes to shove, and the nitty gets down to the gritty, it matters very little to markets if people need goods or want goods, so long as they are motivated to satisfy them. This motivation is what drives economic activity.
Visit the GLOSS*arama
|
|
|
|
                           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, 2000-2024. [Accessed: April 28, 2024].
Check Out These Related Terms... | | | | | | | |
Or For A Little Background... | | | | | | | | | |
And For Further Study... | | | | | | | |
Search Again?
Back to the WEB*pedia
|
|
|
GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time calling an endless list of 800 numbers looking to buy either a how-to book on building remote controlled airplanes or an extra large beach blanket. Be on the lookout for jovial bank tellers.
Your Complete Scope
This isn't me! What am I?
|
|
|
John Maynard Keynes was born the same year Karl Marx died.
|
|
|
"The roots of education are bitter, but the fruit is sweet." -- Aristotle
|
|
UTP
Unfair Trade Practice
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
