BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -A market-clearing price is the price of a good or service at which quantity supplied is equal to quantity demanded, also called the equilibrium price.

Detailed explanation-2: -The equilibrium price is the market price where the quantities of goods supplied are equal to the quantities of goods demanded. This is the point at which the demand and supply curves in the market intersect.

Detailed explanation-3: -Hence the supply and demand are balanced. How to calculate equilibrium quantity? It can be calculated by solving the demand and supply function (Qa – bP = x + yP). Solving the equation when the supply equals the demand gives an equilibrium price.

Detailed explanation-4: -An equilibrium price is a balance of demand and supply factors. There is a tendency for prices to return to this equilibrium unless some characteristics of demand or supply change. Changes in the equilibrium price occur when either demand or supply, or both, shift or move.

Detailed explanation-5: -The equilibrium price is the price at which the quantity demanded equals the quantity supplied. It is determined by the intersection of the demand and supply curves.