What is market disequilibrium?

Marketing Jan 09, 2021

Expert Solution

Market disequilibrium occurs when market don't clear. Market disequilibrium is caused by external forces, causing imbalance between the quantity demanded and quantity supplied, at a given price. If a product is priced below the equilibrium, demand increases while supply decreases creating a market shortage. Alternatively, overpricing a product will reduce demand and increase supply, creating a market surplus. Factors such as sticky wages, government policies and some other social factors causes market disequilibrium.

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