by: Isaiah Hiatt & Bobby Lambert

disequilibrium is a loss or lack of equilibrium or stability,especially in relation to supply, demand, and prices. If the market price or quantity supplied is anywhere but the equilibrium price the market is in disequilibrium.

The 2 causes of disequilibrium are excess demand and excess supply.

excess demand- quantity demanded is more than quantity supplied

excess supply- quantity supplied exceeds quantity demanded

if the supply of mortgage credit to potential home buyers is rationed, this will decrease the demand for newly built houses

if employers cannot hire all the labor they wish to, they cannot produce as much output as they wish to, and supply in the market for their good will be diminished.

Comment Stream