equilibrium price
Equilibrium price is the point in a market where the supply of a good or service matches its demand. At this price, the quantity that sellers want to sell is equal to the quantity that buyers want to purchase, resulting in a stable market. If the price is too high, there will be excess supply (more products than buyers), leading to a decrease in price. Conversely, if the price is too low, demand will outstrip supply, causing prices to rise. Equilibrium reflects a balance, ensuring that resources are allocated efficiently in the economy.
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Equilibrium price is the price at which the quantity of a product that buyers want to purchase matches the quantity that sellers want to sell. At this point, the market is stable because there is no surplus (excess supply) or shortage (excess demand). When prices are above equilibrium, there are more goods than buyers, leading to unsold products. When prices are below equilibrium, demand exceeds supply, causing scarcity. Economists use equilibrium price to illustrate how market dynamics work, helping to balance consumer needs and producer offerings effectively.