When the market price is below equilibrium, excess demand tends to put upward pressure on price.

### Why this is right Below equilibrium, buyers want to purchase more than sellers offer. This excess demand puts upward pressure on price as buyers compete for the available quantity. ### The concept At equilibrium, quantity demanded equals quantity supplied. Below that price, demand exceeds supply; above it, supply exceeds demand. In the note's account, excess supply puts downward pressure on price, while excess demand puts upward pressure on price. ### Terms - **Excess demand**: quantity demanded minus quantity supplied when demand exceeds supply. - **Equilibrium**: the market position where quantity demanded equals quantity supplied. ### Remember Shortage pressure raises price; surplus pressure lowers it.