A Level Economics AQA Practice Exam

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What is associated with a scenario where the quantity supplied is not equal to the quantity demanded?

Equilibrium
Disequilibrium
Market stability
Saturation

The correct answer is: Disequilibrium

In a situation where the quantity supplied does not equal the quantity demanded, the market is said to be in disequilibrium. This concept highlights that the forces of supply and demand are not balanced, leading to either excess supply (surplus) or excess demand (shortage). Disequilibrium indicates that price adjustments are likely to occur as the market seeks to restore balance between supply and demand. In contrast, equilibrium refers to the state where quantity supplied equals quantity demanded, leading to stable market conditions without pressure for changes in price. Market stability suggests that prices and quantities do not fluctuate significantly, while saturation pertains to a situation where supply meets demand at its maximum capacity but is not specifically tied to the mismatch between supply and demand. Therefore, disequilibrium is the most accurate term to describe the imbalance situation indicated in the question.