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: -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. A shortage occurs when demand exceeds supply – in other words, when the price is too low.

Detailed explanation-3: -The point of equilibrium represents a theoretical state of rest where all economic transactions that “should” occur, given the initial state of all relevant economic variables, have taken place.

Detailed explanation-4: -An equilibrium price, also known as a market-clearing price, is the consumer cost assigned to some product or service such that supply and demand are equal, or close to equal. The manufacturer or vendor can sell all the units they want to move and the customer can access all the units they want to buy.

Detailed explanation-5: -At the equilibrium price, there is no shortage or surplus: The quantity of the good that buyers are willing to buy equals the quantity that sellers are willing to sell. Buyers can buy the quantity they want to buy at the market price, and sellers can sell the quantity they want to sell at the market price.