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Equilibrium price

Business and Industry Services
From Australia
To Greece
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Amber S.
Jul 23, 2021

What is the “equilibrium price"?

1 answer

Munmun S.
Jul 23, 2021

This is the price where the amount producers are willing and able to supply converges with the amount consumers are willing and able to purchase. In other words, the equilibrium price is where supply and demand meet and prices settle. If suppliers ignore demand, and continue to produce units and price them too high, they will not be purchased. Instead they will sit in warehouse. If they produce too few, demand will go unmet and consumers will demand for more.

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