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If at a given price of a commodity, ther...

If at a given price of a commodity, there is excess demand, how will the equilibrium price be reached? Explain by diagram.

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Excess demand means that the demand for the commodity is higher than its supply or the market price is lower than the equilibrium price. In such a case, the price is pushed up due to competition among buyers. This increased price leads to an increase in supply and a fall in demand leading a new equilibrium where quantity demanded equals quantity supplied.
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  20. Briefly discuss the meaning of "Price Floor" with the help of diagram.

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