Which explains the connection between the law of demand and excess demand?
The law states that decreases in price leads to greater quantity demanded and limited supply, which occurs during excess demand.
The law states that increases in price increases leads to greater quantity demanded and limited supply, which occurs during excess demand.
The law states that decreases in price leads to greater supply and equilibrium, which occurs during excess demand.
The law states that increases in price leads to greater supply and equilibrium, which occurs during excess demand.

The law of demand indicates that lower prices lead to higher quantity demanded, while excess demand occurs when the quantity demanded exceeds supply at a certain price. When excess demand exists, it typically results in price increases, which can decrease quantity demanded. Thus, the law of demand and excess demand are interconnected through price fluctuations and consumer behavior.
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Answered by Anonymous | 2025-07-04

The law of demand indicates that a decrease in price leads to an increase in quantity demanded, while excess demand occurs when the quantity demanded exceeds the quantity supplied at a certain price. When excess demand is present, prices typically rise, which ultimately causes the quantity demanded to decrease. Therefore, the law of demand and excess demand are interconnected through price changes and their effects on consumer behavior. ;

Answered by GinnyAnswer | 2025-07-04