ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -in a market setting, disequilibrium occurs when quantity supplied is not equal to the quantity demanded; when a market is experiencing a disequilibrium, there will be either a shortage or a surplus.

Detailed explanation-2: -Disequilibrium is a state within a market-based economy in which the economic forces of supply and demand are unbalanced. It is a state where internal or external forces prevent the market from reaching equilibrium, and the market falls out of balance over time.

Detailed explanation-3: -Excess supply is one of the two types of disequilibrium in a perfectly competitive market, excess demand being the other. When quantity supplied is greater than quantity demanded, the equilibrium level does not obtain and instead the market is in disequilibrium.

Detailed explanation-4: -Key Takeaways. Disequilibrium is when external forces cause a disruption in a market’s supply and demand equilibrium.

Detailed explanation-5: -At equilibrium, the quantity demanded is equal to the quantity supplied, meaning the demand is equal to supply at equilibrium. In the instance there is a shortage of a product, the quantity demanded will surpass the quantity supplied, and thus demand will be in excess.