EQUILIBRIUM PRICE
If we plot the supply graph and demand graph for an product on same graph we get equilibrium price,through this graph we determine quantity demand equal to quantity supply.
Demand curve
Supply curve
Equilibrium price
example:
Lets take the example of apple farmer,he want to know the equilibrium price of apples.
|
PRICE
|
QUANTITY DEMANDED
|
QUANTITY SUPPLIED
|
|
500
|
200
|
1000
|
|
400
|
400
|
800
|
|
300
|
600
|
600
|
|
200
|
800
|
400
|
|
100
|
1000
|
200
|
from above table the quantity demanded equals to quantity supplied at price of 300.so, 300 is the equilibrium price.
Equilibrium price
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