Market Disequilibrium: a situation where demand and supply are not equal at the current price is called?

Market Disequilibrium: a situation where demand and supply are not equal at the current price is called?

• A. Market Equilibrium
• B. Market Disequilibrium
• C. Price Ceiling
• D. Price Floor

Answer: (B)

When price leads to demand and supply not matching, the market isn’t balanced. That situation is market disequilibrium. If more is demanded than supplied, a shortage exists; if more is supplied than demanded, a surplus exists. Price ceilings and price floors can cause such mismatches by setting prices away from where supply and demand would naturally meet, but they describe interventions, not the state itself. Market equilibrium is the opposite, where demand equals supply.

When price leads to demand and supply not matching, the market isn’t balanced. That situation is market disequilibrium. If more is demanded than supplied, a shortage exists; if more is supplied than demanded, a surplus exists. Price ceilings and price floors can cause such mismatches by setting prices away from where supply and demand would naturally meet, but they describe interventions, not the state itself. Market equilibrium is the opposite, where demand equals supply.