Final answer:
No, the concept of equilibrium accommodates shortages in specific markets, and excess demand over supply at elite U.S. universities represents a new equilibrium at a higher price level due to the increasing demand and limited supply of education.
Step-by-step explanation:
The situation of excess demand for elite U.S. university education, where the quantity demanded exceeds the quantity supplied, is not contrary to the concept of equilibrium. In this context, No, since equilibrium can tolerate shortages in specific markets. The concept of equilibrium in economic terms refers to a state where the quantity supplied is equal to the quantity demanded at a certain price level, but it does not preclude the existence of shortages or surpluses in certain conditions or specific markets.
Using the demand and supply model, if we see an increase in demand for high-skilled labor as represented by the shift from Do to D₁, and an increase in the supply of workers with college degrees from So to S₁, we may observe a shift in equilibrium from Eo to E₁. This could result in a higher price or wage for high-skilled labor, despite the increased supply.
This would happen because the demand has increased even more than the supply. Despite a shortage in the quantity of education supplied by elite universities, the market can still reach a new equilibrium at a higher price level reflecting the high demand and the limited supply.