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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.
What else can I help you with?
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.
Can you provide an example of a situation where excess demand occurs?
An example of a situation where excess demand occurs is during the release of a highly anticipated product, such as a new iPhone model. The demand for the product exceeds the supply available, leading to shortages and long waiting times for customers.
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.
What factors contribute to the occurrence of excess demand in economics and how does it impact market equilibrium?
Excess demand in economics occurs when the quantity of a good or service demanded by buyers exceeds the quantity supplied by sellers. Factors that contribute to excess demand include high consumer demand, low production levels, and government regulations. This imbalance can lead to shortages, price increases, and a shift away from market equilibrium, where supply equals demand.
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 consumers experience excess demand in the market?
Consumers experience excess demand in the market when the quantity of a good or service demanded by consumers exceeds the quantity supplied by producers. This can lead to shortages, higher prices, and competition among consumers for the limited available supply.
What is the excess demand definition and how does it impact market dynamics?
Excess demand occurs when the quantity of a good or service demanded by buyers exceeds the quantity supplied by sellers at a given price. This imbalance can lead to shortages, price increases, and changes in market dynamics as sellers may raise prices to match demand or increase production to meet the higher demand.
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.
What factors can lead to an excess supply of goods or services as shown on a supply and demand graph?
An excess supply of goods or services on a supply and demand graph can be caused by factors such as overproduction, decreased consumer demand, or changes in market conditions that result in more products being available than consumers are willing to buy at a given price.
