Economics · Market Equilibrium
Which of the following accurately describes the market disequilibrium condition characterized by excess demand?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It is a state where producers are willing to supply any quantity at a given price.
- 2It represents a scenario where sellers hold back the total stock of a commodity from the market in anticipation of future price increases.
- 3It occurs when the market price falls below the equilibrium level, generating a shortage where buyers compete for available goods by bidding prices upward.✓
- 4It occurs when the market price exceeds the equilibrium level, generating a surplus where sellers compete for buyers.
Correct answer
It occurs when the market price falls below the equilibrium level, generating a shortage where buyers compete for available goods by bidding prices upward.
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