Excess Demand at Given Price

Steps:

• Calculate quantity demanded at P=$20: Qd = 400 - 10(20) = 200 units.
• Note supply is fixed at Qs = 100 units.
• Compare: Qd (200) exceeds Qs (100), creating excess demand of 100 units.
• Since Qd ≠ Qs, market is in disequilibrium.

Why A is correct:

• Excess demand exists when quantity demanded surpasses quantity supplied at the price, per basic supply-demand model.

Why the others are wrong:

• B: Excess supply requires Qs > Qd, but here Qd > Qs.
• C: Equilibrium demands Qd = Qs at 100 units, but Qd is 200.
• D: No equilibrium at 200 units, as supply cannot exceed 100.

Final answer: A