Market Equilibrium – AS/A LEVELS/IB/IAL
Market Equilibrium – AS/A LEVELS/IB/IAL
Level: AS Levels, A Level, GCSE – Exam Boards: Edexcel, AQA, OCR, WJEC, IB, Eduqas – Economics Revision Notes
Market Equilibrium
Equilibrium occurs at the intersection where supply and demand meet each other.
This would be somewhere between the price of £40 to £50 on the table below.
Disequilibrium
When supply and demand are not in equilibrium it’s called disequilibrium.
Excess Demand or Supply
Excess demand is highlighted on the diagram below with a price of £20. At this price quantity demanded is (70) whereas quantity supplied is only (20).
Excess supply occurs where supply is greater than demand. At a price of £70 quantity supplied is 70 whereas the quantity demanded is only 20. Therefore we have an excess supply over demand.
Quick Fire Quiz – Knowledge Check
1. Define market ‘Equilibrium’ (2 marks)
2. Define market ‘Disequilibrium’ (2 marks)
3. Using a diagram, explain how Excess Demand may occur in a market (4 marks)
4. Using a diagram, explain how Excess Supply may occur in a market (4 marks)
Next Revision Topics:
A Level Economics Past Papers
