A car dealer who does not have enough customers for a supply of new cars faces:

A car dealer who does not have enough customers for a supply of new cars faces:

A) equilibrium.

B) disequilibrium.

C) coordination.

D) excess demand.

Answer: B) disequilibrium.

Market equilibrium can be defined as a situation within the market where the quantity that is supplied is equal to the quantity that is demanded in that market at a certain price level. If, for instance, car dealers have many new cars that they feel are not enough for the number of people who want to purchase them, then we have a realization of excess supply or surplus. Here, it means that the price is not at its equilibrium since the amount that is supplied in the market is more than the amount that users of the product are willing and able to buy. This disequilibrium situation exerts a downward pressure on prices for signs of large amounts of sellers when they are few. This makes the car dealer remain in a state of disequilibrium until the price comes down to the point where the surplus is bought off thus reaching equilibrium on the supply and demand side. These market forces work towards achieving equilibrium at a point where demand equals supply, hence the equilibrium price and quantity.