Given qD = 2,000 –-p and qS = 200 + 2p. What will be the algebraic expression for excess demand?

1800 -3p

The correct answer is option 2: 1800 -3p

Excess demand is demand minus supply.

So, Qd –- Qs = 2000 - p –- (200 + 2p)

=2000 - p - 200-2p

= 1800 –-3p.

Thus, Excess Demand=1800 –-3p

At equilibrium price, this excess demand will be zero.

For the given question, equilibrium price will be 600.

Putting p = 600 in excess demand equation of 1800 –- 3p, we get zero excess demand.