Q.Write a short note on: Equilibrium Price

Equilibrium price is the price at which quantity demanded equals quantity supplied, fixed by the intersection of the demand and supply curves.

Explanation

Equilibrium price is the price of a commodity at which the amount that buyers are willing to buy is exactly equal to the amount that sellers are willing to sell. It is determined by the forces of demand and supply together — at the point where the demand curve and the supply curve cut each other. At the equilibrium price there is no surplus (excess supply) and no shortage (excess demand), so the market clears and the price stays stable …

Equilibrium price is the market-clearing price at which the quantity demanded equals the quantity supplied. At this price there is no surplus or shortage, and it is determined where the demand and supply curves intersect.

Meaning

Equilibrium price is the price at which the quantity that buyers wish to buy is exactly equal to the quantity that sellers wish to sell. At this price the market is in balance, so there is no tendency for the price to rise or fall.

• If the price is above the equilibrium, supply exceeds demand (a surplus), which pushes the price down.
• If the price is below the equilibrium, demand exceeds supply (a shortage), which pushes the price up.
• Only at the equilibrium price are the two forces balanced. …