--%>

Equilibrium of a market

How can Equilibrium of a market be exist?

E

Expert

Verified

Equilibrium of a market:

It is the point at which the quantity demanded is equivalent to the quantity supplied. When the price is above the equilibrium price, sellers desire to sell more than buyers desire to purchase, therefore there is a surplus. Sellers try to raise their sales by cutting the prices. That carries on till they reach equilibrium price. When the price is beneath the equilibrium price, buyers wish for to purchase more than sellers want to sell, therefore there is a scarcity. Sellers can increase their price devoid of losing customers. That carries on till they reach equilibrium price.

   Related Questions in Macroeconomics

  • Q : Explain about the marginalism theory

    Most economists believe such that people increase an activity when they perceive the expected additional benefits as exceeding the expected extra cost, but decrease their level of an activity whenever they believe the benefits from the last few units of the activity a

  • Q : Describe open market operations

    Describe open market operations? What is its consequence on availability of credit? Answer: Open market operations signify the purchase and sale of government secur

  • Q : What is long run supply curve Please

    Please brief the knowledge what is long run supply?

  • Q : Which things are concerned with

    Macroeconomics is mainly concerned along with all things as the: (i) decisions individuals and firms make while prices change. (ii) resource usage and technology bases of firms. (iii) levels of national employment and income. (iv) movements within the

  • Q : Problem on full employment Does full

    Does full employment take place if AD = AS or S = I?

  • Q : Merger and acquisition of firms

    Question: Suppose firm 1 and firm 2 merge. Call the new firm A. It has output xA and profit πA. Suppose there is Cournot competition after the merger. For now, we assume that the marginal cost of Firm A, the mer

  • Q : Demand-pull inflation What is

    What is "demand-pull" inflation?

  • Q : Fiscal deficit in government budget

    What does fiscal deficit in government budget mean? Answer: This means more borrowing on the portion of government.

  • Q : National income how to calculate

    how to calculate national income under value added method

  • Q : How central bank reduce the

    Describe any two measures by which a Central Bank can attempt to decrease the gap. Answer: Central bank can decrease this gap by adopting two measures illustrated b