A demand & supply schedule shows the quantity demanded & the quantity supplied of a product at different price levels

Demand & supply schedules can be used to identify equilibrium & disequilibrium

At a price of $500, the market is in equilibrium

• The QD = QS (800 units)

At a price of $300 & $400, there is excess demand as the product is more affordable for consumers

• Producers supply less at lower prices as they make less profit per unit

• Producers are incentivised to supply more when prices are higher

  
  

   

At a price of $600 & $700, there is excess supply as the high price has eliminated some buyers from the market

• Producers would love to sell at this high price but in order to clear their stock they have to lower the price & move towards the equilibrium