Market Clearing Price

The Market Clearing Price is the price at which the quantity of goods or services consumers want to buy exactly matches the quantity producers want to sell. It’s the equilibrium point where supply equals demand. In energy markets, for example, it's the price at which enough electricity producers are willing to supply power to meet all consumers’ needs. This price balances the interests of buyers and sellers, ensuring resources are allocated efficiently without excess or shortages. Essentially, it’s the “balance point” that clears the market, establishing fair value for both parties at that moment.