Suppose the demand and supply curves of coffee are given by:

q_D = 1,000 – p

q_S = 700 + 2p

Excess demand will exist at?

Both 1 and 3

the correct answer is Option 4: Both 1 and 3

At equilibrium, market supply = market demand.

Equating them, we get 1000-p = 700+ 2p

1000-700 = 2p + p

300 = 3p

100 = p

At any price less than equilibrium price, there is excess demand. Hence, the correct answer is Both 1 and 3.