The graph shows excess demand. A graph titled Excess supply has quantity on the x-axis and price on the y-axis. A line with positive slope represents supply and a line with negative slope represents demand. The lines intersect at the point of equilibrium (p star, Q star). A point on the demand line is (P 2, quantity demanded) and a point on the supply line is (P 2, quantity supplied). Both points are lower than the point of equilibrium. Excess demand is indicated between the 2 points.

Which needs to happen in order to stop disequilibrium from occurring?

a) Q needs to be coordinated with supply.
b) Q needs to be coordinated with demand.
c) The price of goods needs to be increased.
d) The price of goods needs to be decreased.

c)  The price of goods needs to be increased

Explanation:

From the details of the Excess supply graph, we have;

The y-axis = The quantity supplied

The x-axis = The price

The supply = The line with positive slope

The demand = The line with negative slope

The point of intersection of the lines = (p

A point on the demand line = (P*, Q*)

A point on the demand line = (P₂, Quantity demanded)

A point on the supply line = (P₂, Quantity supplied)  

The excess demand = The distance between the points having the same x-value P₂

Therefore, to stop disequilibrium, from occurring, the price of goods needs to be increased

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