Question

at a price for which quantity demanded exceeds quantity supplied, a ________ is experienced, which pishes the price _________ toward its equilibrium value

Answer 1

Answer - 1. Shortage, 2. Upwards

When the quantity demanded is more than the quantity supplied, there will be a shortage of goods. This condition is called excess demand. It happens when the price is less than the equilibrium price. So, if the quantity demanded is more than the quantity supplied, the market will face a shortage of goods. When there is more more demand compared to supply, the price will tend to rise. This situation will push the price upwards towards its equilibrium value.