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TACIT COLLUSION: Seemingly independent, but parallel actions among competing firms (mostly oligopolistic firms) in an industry that achieve higher prices and profits, much as if guided by an explicit collusion agreement. Also termed implicit collusion, the distinguishing feature of tacit collusion is the lack of any explicit agreement. They key is that each firm seems to be acting independently, perhaps each responding to the same market conditions, but the end result is the same as an explicit agreement. This should be contrasted with explicit or overt collusion that does involve a formal, explicit agreement.
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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: June 30, 2025].
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GRAY SKITTERY
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Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club seeking to buy either a flower arrangement with a lot of roses for your grandmother or a wall poster commemorating the first day of winter. Be on the lookout for cardboard boxes.
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The first paper currency used in North America was pasteboard playing cards "temporarily" authorized as money by the colonial governor of French Canada, awaiting "real money" from France.
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"I learned about the strength you can get from a close family life. I learned to keep going, even in bad times. I learned not to despair, even when my world was falling apart. I learned that there are no free lunches. And I learned the value of hard work. " -- Lee Iacocca
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WTO
World Trade Organization
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