If equilibrium price of a good is greater than its market price, explain all the changes that will take place in the market. Use diagram.
OR
Explain the changes that will take place in the market when market price of a good is less than its equilibrium price. Use diagram.

Explanation

Since the market price is less than the equilibrium price, there will be excess demand for the commodity. As a result, the competition among the buyers increase leading to an increase in the market price. An increase in price leads to a fall in quantity demanded and an increase in quantity supplied. These changes occur until a new equilibrium is achieved where quantity supplied equals quantity demanded.