Question

When does a supply-side gap directly imply a demand-side gap? And when are they independent?

Answer 1

lets consider that market have perfect compitition . And there by demand curve is downward sloping and supply curve is upward sloping . When the supply and demand curve interact with each other is the equlibrium point where demand and supply is same and customer get maximum satisfaction for the product .

On the other hand above the equilibrium point is the gap of excess supply over the demand .

And below the equilibrium point is the excess of demand over the supply .

At all these point of gap both the demand and supply curve act independetly .