How to calculate excess demand?

Understand the Problem

The question is asking about the method or formula to determine excess demand, which typically involves comparing the quantity demanded to the quantity supplied at a given price level in a market. This is a common concept in economics.

More Information

Excess demand occurs when the quantity demanded by consumers at a given price exceeds the quantity that producers are willing to supply. It's commonly observed when prices are set below the equilibrium price.

Tips

A common mistake is confusing excess demand with a shortage, which only pertains to short periods, while excess demand persists until price adjustments.

Sources

• Supply and Demand - .econ.iastate.edu
• What is excess demand/ excess supply? - Economics Stack Exchange - economics.stackexchange.com
• Excess Demand: Meaning, How to Calculate, Causes - Penpoin. - penpoin.com