Maret Equilibrium

            The point of rest where demand and supply intersect is called market equilibrium. Here, an intersaction of to opposite market forces ‘demand & supply’ determines an equilibrium price, where the quantity demanded and supply are equal. Here, the market equilibrium and equilibrium price can be analyzed with under the help of the following figure:

   Loading…..

           On the above figure quantity demanded, quantity supply and the price is measured along y-axis & y-axis respectively. D & S are the demand and supply curve respectively. E is an equilibrium where demand and supply are intersect together. Hence, the equilibrium price P is determined as: when the price was P1 there  is higher quantity of supplying commodities but the demand is low, which causes excess supply and there is more surplus. Thus it pushes it towards P. When the price is P2 there is higher demand and the limited supplying commodities which cause the problem of scarcity in this situation of excess demand. Thus it also pushes the price upward at P. The restion point of price  equilibrium price is determined on P from the intersaction between both “Demand & Suply”.

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Create a website or blog at WordPress.com

Up ↑

Patrick W. Marsh

monsters, monsters, everywhere

drizzleandhurricanebooks.wordpress.com/

Young Adult Books, travelling, and a whole lot of bookish feelings.

Chronicles of an Anglo Swiss

Welcome to the Anglo Swiss World

Diary of Dennis

Photography, Technology, PC Gaming, Tutorials

By Common Consent, a Mormon Blog

The greatest Mormon blog in the universe.

Live to Write - Write to Live

We live to write and write to live ... professional writers talk about the craft and business of writing

boy with a hat

writing as a way of life

Minnesota Prairie Roots

Writing and photography by Audrey Kletscher Helbling

%d bloggers like this: