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Scarcity of the product, or if the price of the product has dropped.
JohnnyChampagne's answer:
When quantity demanded is more than quantity supplied. When the actual price in a market is below the equilibrium price, you have excess demand, because a low price encourages buyers and discourages sellers.
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Why does a price based system works more efficiently than central planning?
because it help you to have excess demand
What is the advantage of Lead Strategy in regards to Capacity?
Capacity Planning is a proactive approach to determining how much capacity a company should maintain in lieu of anticipated market demand. Lead Strategy is the concept of increasing capacity in anticipation of an increase in demand. The advantage of lead strategy is an offensive advantage. It places the organization in the correct position to capture market share by fueling increased purchases. Often times aggressive corporate governance is well supported by a lead strategy with production and capacity. The downside to this particular strategy is the fallout of a failed market grab. Any marketing push, price drop to fuel market growth, or new product release can fail. In the event of a lead strategy there is a larger risk involved on the part of the manufacturer should the demand not meet the supply.
What are the 4 characteristics of business demand?
the 4 characteristics of business demand are derived demand, fluctuating demand, stimulating demand and finally demand elasticity!
What is potential demand?
what is potential demand?
What is local demand?
the demand that is existing more in a current scenario refers to as local demand.
How the increase in expansion affect the demand?
Increase in expansion affect the demand because more supply/expansion with constant demand will lead to excess in expansion which affect the demand.
Which situation best illustrate the concept excess demand?
Currently, due to rumors of gun control legislation, there is an excess demand for high capacity magazines. You can see the results of excess demand by searching for high capacity magazines for sale. Every venue that offers them for sale has nothing in stock. Places that do have them in stock are asking extraordinary prices for them. Therefore, the example of excess demand of high capacity magazines illustrates that excess demand causes scarcity of product and inflation of price. Conversely, excess supply will likely cause decreased prices.
How can the situation of excess demand be tackled?
The following are some of the possibilities to tackle the situation of excess demand. - queue system In this case, first come first served principle holds good. The customers will have to stand in line. Early comers at the head of the line are served while customers at the end may get nothing. - seller's discretion - rationing
When does excess demand occur in the equilibrium price?
Excess demand occurs when demand outweighs supply. This means there is a shortage of a good.
How Excess demand and excess supply eliminated by market forces?
Excess demand is easily eliminated by market forces. If either the price or the supply goes up, demand will decrease exponentially.
How do you response for excess demand and excess supply?
Increase the price
What is the difference between excess demand and excess supply?
Excess demand (a seller's market) means the product is in short supply and prices will rise. Excess supply (buyer's market) means too much product as compared to demand and therefore prices will fall.
How did surplus lead to trade?
Surplus are basically excess products which may of course lead to trade. After all, these excess products may lead to excess profit as well
What happens when excess demand occurs in an unregulated market?
Excess demand in an unregulated market will cause the price of a product to fall. True or False?
How do you eliminate excess demand and excess supply in equilibrium?
Price is one way to eliminate excess demand and excess supply. Once prices start to rise, the amount of people purchasing or needing certain products go down.
What is a sudden lack of availability?
Excess Demand.
Why is lead again in demand?
The primary demand for lead in 2003 resulted from growing demand for rechargeable automobile batteries
