MARKET EQUILIBRIUM Narrative Amor 
MARKET EQUILIBRIUM
Consumers and producers react differently to price changes. Higher prices tend to reduce demand while encouraging supply, and lower prices increase demand while discouraging supply.
Market equilibrium in this case refers market state where the supply in the market is equal to the demand in the market.
Economic theory suggests that, in a free market there will be a single price which brings demand and supply into balance, called equilibrium price. If a market is at equilibrium, the price will not change unless an external factor changes the supply or demand, which results in a disruption of the equilibrium.
Equilibrium in the real world:
In the real world, everything else does not remain constant. Changes occur all the time in a dynamic economy. This means that equilibrium is seldom reached. However, forces are always at work to move towards equilibrium.
MARKET DISEQUILIBRIUM: When the market is not in equilibrium we call this disequilibrium. When the market is in disequilibrium, there will be pressure on the market. These pressures are from the needs of consumers for goods and services (demand) and the need of producers to sell their goods and services (supply)
Market disequilibrium results if the demand price is not equal to the supply price and the quantity demanded is not equal to the quantity supplied.
In general, disequilibrium results if opposing forces are not in balance. For market disequilibrium, the opposing forces that are out of balance are demand and supply. The result of the imbalance between these two forces is the existence of a shortage or surplus, which induces a change in the price.
Shortage and Surplus
Market disequilibrium is characterized by either a surplus or a shortage. Both arise due to the inequality between quantity demanded and quantity supplied.
Shortage: A shortage exists if the quantity demanded exceeds the quantity supplied at the current market price. This condition emerges if the market
Consumers and producers react differently to price changes. Higher prices tend to reduce demand while encouraging supply, and lower prices increase demand while discouraging supply.
Market equilibrium in this case refers market state where the supply in the market is equal to the demand in the market.
Economic theory suggests that, in a free market there will be a single price which brings demand and supply into balance, called equilibrium price. If a market is at equilibrium, the price will not change unless an external factor changes the supply or demand, which results in a disruption of the equilibrium.
Equilibrium in the real world:
In the real world, everything else does not remain constant. Changes occur all the time in a dynamic economy. This means that equilibrium is seldom reached. However, forces are always at work to move towards equilibrium.
MARKET DISEQUILIBRIUM: When the market is not in equilibrium we call this disequilibrium. When the market is in disequilibrium, there will be pressure on the market. These pressures are from the needs of consumers for goods and services (demand) and the need of producers to sell their goods and services (supply)
Market disequilibrium results if the demand price is not equal to the supply price and the quantity demanded is not equal to the quantity supplied.
In general, disequilibrium results if opposing forces are not in balance. For market disequilibrium, the opposing forces that are out of balance are demand and supply. The result of the imbalance between these two forces is the existence of a shortage or surplus, which induces a change in the price.
Shortage and Surplus
Market disequilibrium is characterized by either a surplus or a shortage. Both arise due to the inequality between quantity demanded and quantity supplied.
Shortage: A shortage exists if the quantity demanded exceeds the quantity supplied at the current market price. This condition emerges if the market