Market Equilibrium Analysis

Market equilibrium analysis examines the point where the quantity of goods or services that consumers want to buy equals the quantity producers want to sell at a certain price. At this point, the market price stabilizes because there’s no shortage or surplus. If demand increases, prices tend to rise until a new balance is found; if supply increases, prices may drop. This analysis helps understand how markets naturally find a balance and how changes in supply or demand can impact prices and availability, guiding businesses and policymakers in making informed decisions.