Apr 27 2012
When the price in a market is either too high or too low, so that the quantities supplied and demanded are not the same. If a price is higher than equilibrium, there will be a surplus in the market, meaning the quantity supplied will be greater than the quantity demanded. If a price is below equilibrium, there will be a shortage, meaning that the quantity demanded will be greater than the quantity supplied.
About the author: Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author