Now let's look at the supply side. Excess demand is the amount demanded minus the amount supplied. If excess demand is negative, the amount supplied is bigger than the amount demanded, and you have excess supply. Excess demand and excess supply are important to the model because they encourage competition that tends to make the price change. Excess demand tends to induce competition among the buyers that forces prices up.
Excess supply tends to induce competition among the sellers that forces prices down.
Equilibrium is reached when there is no tendency for the price to move either way. At eqilibrium there is no excess demand or excess supply. Let's put a whole supply schedule on the table. Here are two questions about excess supply and excess demand. Now, to reiterate a point made earlier, suppose we have excess demand.