Demand and Supply schedules for Mangoes Price of fruit (Le) Supply (No of baskets) Demand (No of baskets) 1,000.00 10 60 2,000.00 20 50 3,000.00 30 40 4,000...

At Le 1,000.00, what will be the excess demand over supply of mangoes?

Answer Details

At a price of Le 1,000.00, the demand for mangoes is 60 baskets while the supply is only 10 baskets. Therefore, the excess demand over supply of mangoes is 50 baskets. Excess demand occurs when the quantity of a good demanded by consumers exceeds the quantity supplied by producers at a particular price level. In this case, the demand for mangoes at a price of Le 1,000.00 is greater than the amount of mangoes that suppliers are willing and able to sell at that price, resulting in a shortage or excess demand of 50 baskets. This situation can lead to higher prices as consumers are willing to pay more to obtain the desired quantity of mangoes, and producers may increase supply to take advantage of the higher prices. Conversely, if the excess demand persists, some consumers may switch to other substitute fruits, and some producers may switch to producing other fruits, leading to a decrease in the excess demand.