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Disequilibrium in markets

Describe two different markets where there has been a market disequilibrium. That is, there is a shortage or a surplus. This is often temporary for weeks or months, maybe because of a natural disaster. Briefly discuss the supply and demand curve in each case. What can a manager of a firm within this industry do to minimize the impact of this situation (or to take the best advantage of it)?

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Disequilibrium in Markets:

This is a condition that creates an imbalance in the market conditions. This occurs when the demands that are in the business environment can not be met with the supply that has been offered in the market. In certain markets the supply levels can dominate the demand which is referred as a surplus and vise versa which is termed as a shortage (Market Disequilibrium, 2012).

A Surplus Market Condition:

This market condition occurs when the quantity rates that have been supplied exceed that which was demanded at the same price levels. In this market condition organizations lack the ability of selling their commodities based at the same price levels and opt to reduce their prices. This condition creates a market disequilibrium that will lead to the altering the prices of the goods and services in the business market. This takes place when the production rates are higher, alterations in the ...

Solution Summary

The solution discusses disequilibrium in markets.