Question

In economics, the point at which the supply equals the demand is the equilibrium price. If the supply of a product is greater than the demand, there is a surplus and prices fall. If the supply is less than the demand, there is a shortage and prices rise. At what quantity will the prices stabilize? What is the equilibrium price for this product?

Name: Problem 29, Chapter 3: Algebra 2
Uploaded: 2020-03-25T02:09:44-08:00
Duration: 1 min 31 s
Channel: Alanya Huang
Description: In economics, the point at which the supply equals the demand is the equilibrium price. If the supply of a product is greater than the demand, there is a surplus and prices fall. If the supply is less than the demand, there is a shortage and prices rise. At what quantity will the prices stabilize? What is the equilibrium price for this product?

   In economics, the point at which the supply equals the demand is the equilibrium price. If the supply of a product is greater than the demand, there is a surplus and prices fall. If the supply is less than the demand, there is a shortage and prices rise.
At what quantity will the prices stabilize? What is the equilibrium price for this product?

Algebra 2

Holliday, Luchin,… 1st Edition

Chapter 3, Problem 29

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Solved by Expert Alanya Huang

03/25/2020

Step 1

The equilibrium price is the price at which the quantity demanded by consumers equals the quantity supplied by producers. This is the point where the supply and demand curves intersect on a graph. Show more…

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In economics, the point at which the supply equals the demand is the equilibrium price. If the supply of a product is greater than the demand, there is a surplus and prices fall. If the supply is less than the demand, there is a shortage and prices rise. At what quantity will the prices stabilize? What is the equilibrium price for this product?

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Key Concepts

Surplus and Shortage

A surplus occurs when the supply of a product exceeds its demand, leading to downward pressure on prices. Conversely, a shortage happens when demand exceeds supply, causing prices to rise. These conditions push the market back toward equilibrium.

Equilibrium Price

The equilibrium price is the specific price at which the quantity demanded by consumers matches the quantity supplied by producers. This price ensures there is neither a surplus nor a shortage in the market.

Market Equilibrium

Market equilibrium is the state in which the quantity supplied equals the quantity demanded. At this point, there is no incentive for price to change because the market forces of supply and demand are in balance.

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