ECONOMICS (CBSE/UGC NET)

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: -equilibrium price the price in a market at which the quantity demanded and the quantity supplied of a good are equal to one another; this is also called the “market clearing price.”

Detailed explanation-3: -Equilibrium is the state in which market supply and demand balance each other, and as a result prices become stable. Generally, an over-supply of goods or services causes prices to go down, which results in higher demand-while an under-supply or shortage causes prices to go up resulting in less demand.

Detailed explanation-4: -When market equilibrium occurs, quantity demanded is equal to quantity supplied, which means that both sellers and buyers get what they want.

Detailed explanation-5: -When both demand and supply increase, the equilibrium quantity rises but the change in equilibrium price is ambiguous.