ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -This point–at which supply is equal to demand–is called the equilibrium price. At the equilibrium point, the market price for a given good ensures that the quantity of goods supplied is equal to the number of goods demanded.

Detailed explanation-2: -Market Equilibrium: Where Supply Meets Demand Equilibrium is the point where demand for a product equals the quantity supplied. This means that there’s no surplus and no shortage of goods.

Detailed explanation-3: -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. A surplus exists if the quantity of a good or service supplied exceeds the quantity demanded at the current price; it causes downward pressure on price.

Detailed explanation-4: -Demand is generally considered to slope downward: at higher prices, consumers buy less. The point at which the two curves intersect represents the market-clearing price-the price at which demand and supply are the same.

Detailed explanation-5: -The four basic laws of supply and demand are: If supply increases and demand stays the same, prices will fall. If supply remains constant and demand decreases, prices will fall. If supply decreases and demand stays the same, prices will rise. If supply remains constant and demand increases, prices will rise.