How is market equilibrium achieved?
1 Answer
May 28, 2015
When quantity demanded equals quantity supplied, we reach market equilibrium situation.
We know that quantity demanded is a function of price and its demand is inversely related to price. Similarly, quantity supplied is also a function of price but it is directly related to it.
So, when we plot demand curve and supply curve together on one graph, we get a point of intersection and at that point market equilibrium is achieved.
https://courses.byui.edu/econ_150/econ_150_old_site/lesson_03.htm
You can check out this link to get a more detailed understanding of demand and supply concepts and also market equilibrium.
