Disequilibrium is when external forces cause an imbalance between supply and demand in the market. In response, the market enters a state in which supply and demand do not match.
The disequilibrium is caused by several reasons, from government intervention to labor market inefficiencies and unilateral actions of the supplier or distributor.
Disequilibrium is usually resolved when the market enters a new equilibrium state.
For example, people are interested in starting to produce more goods at inflated prices, increasing supply to meet demand and reducing the price to its equilibrium state.
Examples may include short term scenarios such as flash crashes or long term events such as recessions and depressions.
“Best Effort” is a legal term that represents the obligation of a party to a contract to take all possible steps to fulfill the terms of the agreement.
Economic equilibrium is a state in which market forces are balanced, a concept borrowed from the physical sciences, where observable physical forces can balance each other.
An economist is an expert who studies the relationship between a society’s resources and its production or output, using a number of different indicators to predict future trends.
A trade-off between equity and efficiency arises when there is some conflict between maximizing net economic efficiency and achieving other social goals.
External economies of scale - these are factors that contribute to the development of business, which are manifested outside the company, but within the same industry.