• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Finance Train

Finance Train

High Quality tutorials for finance, risk, data science

  • Home
  • Data Science
  • CFA® Exam
  • PRM Exam
  • Tutorials
  • Careers
  • Products
  • Login

Stable and Unstable Equilibrium

CFA® Exam Level 1, Economics

Demand and Supply Stable and Unstable Equilibrium

When the demand and quantity deviate from their equilibrium levels, the market forces will interact with each other to bring the price and quantity back to its equilibrium level. As long as this is possible the equilibrium is labelled as stable.

The equilibrium will be stable as long as the supply curve cuts through the demand curve from above, irrespective of whether the supply curve slopes upwards or downwards. The equilibrium will be stable in both the situations below:

However, there are some situations where the equilibrium is unstable. For example, when the slope of the supply curve is less than the demand curve or when the supply function is non-linear.

Previous Lesson
Back to Course
Next Lesson

Primary Sidebar

In this Course

Course Home
Types of Markets in Economics
Demand Function and Demand Curve
Supply Function and Supply Curve
Shifts in Demand and Supply Curves
Aggregating Demand and Supply Curves and Concept of Equilibrium
Excess Demand and Excess Supply
Stable and Unstable Equilibrium
Types of Auctions
Four Methods of Distributing Government Securities
Consumer and Producer Surplus
Effects of Government Regulation on Demand and Supply
Price Elasticity of Demand
Income Elasticity of Demand
Cross Price Elasticity of Demand
Return to Demand and Supply

Latest Tutorials

    • Data Visualization with R
    • Derivatives with R
    • Machine Learning in Finance Using Python
    • Credit Risk Modelling in R
    • Quantitative Trading Strategies in R
    • Financial Time Series Analysis in R
    • VaR Mapping
    • Option Valuation
    • Financial Reporting Standards
    • Fraud
Facebook Group

Membership

Unlock full access to Finance Train and see the entire library of member-only content and resources.

Subscribe

Footer

Recent Posts

  • How to Improve your Financial Health
  • CFA® Exam Overview and Guidelines (Updated for 2021)
  • Changing Themes (Look and Feel) in ggplot2 in R
  • Coordinates in ggplot2 in R
  • Facets for ggplot2 Charts in R (Faceting Layer)

Products

  • Level I Authority for CFA® Exam
  • CFA Level I Practice Questions
  • CFA Level I Mock Exam
  • Level II Question Bank for CFA® Exam
  • PRM Exam 1 Practice Question Bank
  • All Products

Quick Links

  • Privacy Policy
  • Contact Us

CFA Institute does not endorse, promote or warrant the accuracy or quality of Finance Train. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

Copyright © 2021 Finance Train. All rights reserved.

  • About Us
  • Privacy Policy
  • Contact Us