1. What Is Supply And Demand Equilibrium?

The equilibrium price is the market price where the quantity of goods supplied equals the quantity of goods demanded. This is the point where the supply curve intersects the demand curve in economic theory.

2. How Does The Calculator Work?

The calculator determines the equilibrium point where:

Where:

• \( \text{Supply} \) — Quantity of goods producers are willing to sell
• \( \text{Demand} \) — Quantity of goods consumers are willing to buy
• \( \text{Equilibrium Price} \) — Price where market clears

Explanation: At equilibrium price, there is no excess supply or demand in the market, creating market stability.

3. Importance Of Equilibrium Price

Details: The equilibrium price is crucial for market efficiency, resource allocation, and economic planning. It helps businesses determine optimal production levels and pricing strategies.

4. Using The Calculator

Tips: Enter supply quantity and demand quantity in units. The calculator will determine the equilibrium price where these two values intersect.

5. Frequently Asked Questions (FAQ)

Q1: What happens when supply exceeds demand?
A: When supply exceeds demand, it creates a surplus, leading to downward pressure on prices until equilibrium is restored.

Q2: What happens when demand exceeds supply?
A: When demand exceeds supply, it creates a shortage, leading to upward pressure on prices until equilibrium is reached.

Q3: Can equilibrium price change over time?
A: Yes, equilibrium price can shift due to changes in production costs, consumer preferences, technology, or external economic factors.

Q4: What factors affect supply and demand curves?
A: Supply is affected by production costs, technology, and number of suppliers. Demand is affected by consumer income, preferences, and prices of related goods.

Q5: Is equilibrium always achieved in real markets?
A: In practice, markets may not always reach perfect equilibrium due to market imperfections, information asymmetry, and government interventions.