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What Role Do Market Equilibrium and Disequilibrium Play in Supply and Demand?

Market equilibrium is like a balance where what people want to buy matches what sellers are offering. However, reaching this balance can be tricky.

When there is disequilibrium, it means that prices go up and down too much. This can cause either too much stuff being sold or not enough, which creates problems.

Challenges:

  • Prices changing a lot can make people worried about money.
  • If what people want doesn't match what is being made, it makes things worse.

Solutions:

  • Setting limits on prices can help keep things steady.
  • Talking more between sellers and buyers can help make sure there is just the right amount of stuff available.

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What Role Do Market Equilibrium and Disequilibrium Play in Supply and Demand?

Market equilibrium is like a balance where what people want to buy matches what sellers are offering. However, reaching this balance can be tricky.

When there is disequilibrium, it means that prices go up and down too much. This can cause either too much stuff being sold or not enough, which creates problems.

Challenges:

  • Prices changing a lot can make people worried about money.
  • If what people want doesn't match what is being made, it makes things worse.

Solutions:

  • Setting limits on prices can help keep things steady.
  • Talking more between sellers and buyers can help make sure there is just the right amount of stuff available.

Related articles