Question

What is the relationship between quantity

demanded and quantity supplied at equilibrium? What is

the relationship when there is a shortage? What is the

relationship when there is a surplus?

Short answer

At equilibrium, the quantity supplied is equal to the quantity demanded.

Step-by-step solution

Step 1.Quantity Demanded 

is the total number of goods and services purchased at a given price.

Quantity supplied means total units sold at the given price.

Equilibrium is when-

Quantity demanded$=$Quantity supplied

Step 2.when there is a shortage-

Demand for goods increases & supply decreases.

when there is a surplus-

demand decreases & supply increases

Step 3.Excess demand & supply diagram.

Explanation:

The quantity demanded is on X-axis

Price at Y-axis

Equilibrium at point E (Qd=Qs)

at price above equilibrium:

Quantity supplied>Quantity demanded

at price below equilibrium:

Quantity supplied<quantity demanded