Meaning & use
excess demand
Last updated
Meaning
noununcountablespecialistbusinessfinance
A situation where people want to buy more of a good or service than is available at the current price.
Grammar: Uncountable; used with 'there is' or 'cause'. Often followed by 'for'.
Patterns
- excess demand for something
- cause/create excess demand
- there is excess demand
When the government fixed the price of bread, excess demand led to long queues.
There is excess demand for housing in the city, so rents keep rising.
Economists warn that excess demand could push inflation higher.
Common combinations
- excess demand for goods
- The price controls created excess demand for goods.
- cause excess demand
- A sudden rise in income can cause excess demand.
- excess demand pressures
- The central bank raised interest rates to reduce excess demand pressures.
- eliminate excess demand
- Raising the price should eliminate excess demand.
Synonyms and how they differ
- shortage
- General word for not having enough of something; excess demand is the economic cause of a shortage.
- overdemand
- Rare; means the same but is less common in academic writing.
Opposites
Word family
Commonly confused: excess demand or excess supply?
excess demand vs excess supply
The opposite situation: more goods are available than people want to buy at the current price.
Practice
In economics, what does 'excess demand' mean?
Choose one answer.
Excess demand means demand is greater than supply at the current price. Option A describes excess supply, not excess demand.
Make it your own
Write a sentence using “excess demand”, then check it and compare it with the examples above.