studying long-run issues, such as growth in real GDP. Other economists argue that price adjustment may take so much time that the process of equilibration may change the underlying conditions that determine long-run equilibrium. That is, there may be path dependence, as when a long depression changes the nature of the "full employment" period that follows. In the short run (and possibly in the long run), markets may find a temporary equilibrium at a price and quantity that does not correspond with the long-term market-clearing equilibrium. For example, in the theory of "efficiency wages", a labor market can be in equilibrium above the market-clearing wage since each employer has the incentive to pay wages above market-clearing to motivate their employees on the job. In this case, equilibrium wages (where there is no endogenous tendency for wages to change) would not be the same as market-clearing wages (where there is no classical unemployment). Flexibility in market clearing Both labor market wages and product market prices are fully flexible and can change rapidly based on supply and demand. Because of this flexibility, there will be no oversupply in both the product and labor markets. If there is an oversupply of a product, prices fall until the price of the item falls enough that buyers are willing to buy it; if there is a surplus of labor, wages fall until employers are willing to provide jobs for all the unemployed who want to work. Therefore, every market is in or tends to be in general equilibrium, i.e. equal supply and demand. For example, electronics retailers will sell old cell phones, computers, and other electronics at low prices. Through this method, the old products are sold faster and the warehouse is cleared to achieve equilibrium. Price flexibility allows previously "disappointed" buyers to purchase the product to achieve equilibrium. See also Double auction Economic equilibrium Supply and demand References Sources "Market Clearing" in International Encyclopedia of the Social Sciences. Retrieved April 25, 2022 from Encyclopedia.com: https://www.encyclopedia.com/social-sciences/applied-and-social-sciences-magazines/market-clearing Scholar.harvard.edu. 2022. [online] Available at: <https://scholar.harvard.edu/files/gborjas/files/lechapter4.pdf> [Accessed 2 May 2022]. Financial markets