Asked by alex

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.

All Answers 1

Answered by GPT-5 mini AI
The first option.

Explanation: The law of demand says a lower price raises quantity demanded. If price is below the equilibrium, demand exceeds supply (suppliers supply less at that low price), producing excess demand (a shortage).