How is the market equilibrium determined?

Diagrammatically, this is where the demand and supply curves meet. The demand curve shows the quantity demanded by consumers at different prices, and the supply curve shows the quantity producers are willing and able to supply at different prices. At the point where they meet, the price is the equilibrium market price where the quantity demanded and quantity supplied are equal, so the market clears- forming an equilibrium.

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Answered by Jasmine K. Economics tutor

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