Question 2:

Suppose that the equilibrium quantity of wheat is 21 billion bushels and that the level of output that will be produced at the current price is 24 billion bushels. The situation is

1. one of neither excess supply nor excess demand since the quantity would otherwise have changed.

2. one of excess demand because that is the only reason why the quantity could increase to 24 billion bushels.

3. one of excess supply since the quantity demanded must surely be less than 21 billion bushels.

4. none of above.

Choose the option that yields the correct answer.