Disequilibrium of Excess Supply
A disequilibrium market transpires due to a lack of balance between supply, demand, and prices. Excess supply is one of the two conditions of disequilibrium in a perfect competition market; excess demand being the other condition. When quantity supplied is greater than quantity demanded, the equilibrium level transitions into a disequilibrium market. For this reason, an excess supply prevent the economy from operating efficiently, which instead causes a dysfunctional market.
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Famous quotes containing the words excess and/or supply:
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