Excess supply and excess demand are a result of b) disequilibrium.
When the market isn’t in equilibrium, prices may not accurately reflect the balance between supply and demand. In a state of disequilibrium, the quantity supplied can exceed the quantity demanded, leading to excess supply. Conversely, if demand surpasses supply, it creates excess demand. These situations arise when market prices do not adjust to bring supply and demand back into balance, highlighting the importance of equilibrium in market economics.