jbaldyga

Excess supply drives prices down (in stable and unstable markets) and excess demand drives prices up.
However in unstable markets there is a tendancy to move away from the equilibrium, because supply is steeper (downwards) sloped. So above the intersect (equilibrium) there is a tendency to higher prices (excess demand) and below the intersect there is a tendency to lower prices (excess supply). So the market can spiral to higher prices (bubble), or to lower prices. Basically a stable market has a tendency towards equilibrium, unstable does not.