AMANDA AND LEXI
A situation where internal and/or external forces prevent market equilibrium from being reached or cause the market to fall out of balance.
- If the supply of mortgage credit to potential homebuyers is rationed, this will decrease the demand for newly built houses.
- If laborers cannot supply all the labor they wish to, they will have constrained income and their demand in the goods market will be lower.
- 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.