With the help of diagram , show the situation of excess demand .Explain how equilibrium is restored.

Dear student,

Excess demand refers to a situation in which a demand of a good in market exceeds its supply. 
With increase in demand of a good, the competition will increase, the number of suppliers will increase in the market which in turn will increase equilibrium price and quantity.
Excess demand is a dis-equilibrium condition in the market wherein consumers are demanding more than what is supplied. Since there are two many purchasers running after few goods, the price bids up which results in exclusion of some consumers and increase in supply.This goes on till the equilibrium in market is restored. Following diagram shows the movement along the curves.​​​​​​​



Regards