Quantity adjustment

In economics, quantity adjustment is the process by which a market surplus leads to a cut-back in the quantity supplied or a market shortage causes an increase in supplied quantity. It is one possible result of supply and demand disequilibrium in a market. Quantity adjustment is complementary to pricing. In economics, quantity adjustment is the process by which a market surplus leads to a cut-back in the quantity supplied or a market shortage causes an increase in supplied quantity. It is one possible result of supply and demand disequilibrium in a market. Quantity adjustment is complementary to pricing. In the textbook story, favored by the followers of Leon Walras, if the quantity demanded does not equal the quantity supplied in a market, 'price adjustment' is the rule: if there is a market surplus or glut (excess supply), prices fall, ending the glut, while a shortage (excess demand) causes price to rise. A simple model for price adjustment is the Evans price adjustment model, which proposes the differential equation: