ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Also called a market-clearing price, the equilibrium price is the price at which demand matches supply, producing a market equilibrium acceptable to buyers and sellers.

Detailed explanation-2: -Equilibrium price. When a product exchange occurs, the agreed upon price is called an equilibrium price, or a market clearing price. Graphically, this price occurs at the intersection of demand and supply as presented in Image 1.

Detailed explanation-3: -The price at which the quantity demanded equals the quantity supplied is the equilibrium price because at this price the plans of producers and consumers are coordinated and there is no influence on the price to change.

Detailed explanation-4: -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-5: -Equilibrium: Where Supply and Demand Intersect When two lines on a diagram cross, this intersection usually means something. On a graph, the point where the supply curve (S) and the demand curve (D) intersect is the equilibrium.