Answered

Which explains the connection between the law of demand and excess demand?

A. The law states that decreases in price lead to greater quantity demanded and limited supply, which occurs during excess demand.
B. The law states that increases in price lead to greater quantity demanded and limited supply, which occurs during excess demand.
C. The law states that decreases in price lead to greater supply and equilibrium, which occurs during excess demand.
D. The law states that increases in price lead to greater supply and equilibrium, which occurs during excess demand.



Answer :

GinnyAnswer

Final answer:

The law of demand states that price and quantity are inversely related. Excess demand happens when quantity demanded surpasses quantity supplied at a set price.


Explanation:

The law of demand states that quantity and price are negatively related. If the price increases, the quantity demanded will decrease, and vice versa. Excess demand occurs when the quantity demanded exceeds the quantity supplied at a given price, leading to shortages and pressure for prices to rise to reach equilibrium.


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