The position where demand is greater than supply at a given price and there are shortages in the market

• A. Demand
• B. Shortage
• C. Excess demand
• D. Surplus

Answer: (C)

When demand is greater than supply at a given price, the market is in excess demand. This means there aren’t enough goods to satisfy all buyers at that price, creating a shortage. The key idea is the gap between what buyers want to buy and what sellers are offering—the size of that gap is the excess demand.

Shortage describes the same situation in everyday terms, but the term excess demand is the precise label for the imbalance at that price. The other options don’t fit: demand alone isn’t about an imbalance, a surplus is when supply exceeds demand, and shortage is just another way to name the situation but the term highlighting the gap is excess demand.