Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Example of state of disequilibrium
Expert Solution
Step 1
State of disequilibrium refers to the situation when the market demand is not equal to the market supply. This is because equilibrium is achieved when the market demand is equal to the market supply. State of disequilibrium leads to the two situations in the market:
- Shortage: When the market demand is greater than market supply.
- Surplus: When the market supply is greater than market demand.
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