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We found in Hyper-V Manager of one of the host servers, that one of the VMs in Win 2008R2 cluster shows "higher" Memory Demand than the Max Dynamic RAM allocated to the VM (attached is the screenshot).

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Is this possible?

All the documentation provided by Microsoft insist that a VM cannot access more memory than the Max RAM. Can anyone explain how this is possible ?

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"Memory demand" means the amount of memory that the running OS and applications are trying to consume. If it's greater than the amount of memory assigned, then the VM will be paging out.

From TechNet:

The Memory Demand column shows how much memory the virtual machine needs at this time to meet the requirements of the active processes running in the virtual machine. This amount represented the total committed memory based on data obtained from performance counters.

So we can see that this VM needs more RAM than you've allocated to it.

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