![]() ![]() At a price above the equilibrium, there is a natural tendency for the price to fall. The equilibrium quantity is the quantity demanded and supplied at the equilibrium price. The equilibrium price in the market for coffee is thus $6 per pound. The equilibrium price in any market is the price at which quantity demanded equals quantity supplied. Unless the demand or supply curve shifts, there will be no tendency for price to change. Buyers want to purchase, and sellers are willing to offer for sale, 25 million pounds of coffee per month. ![]() Notice that the two curves intersect at a price of $6 per pound-at this price the quantities demanded and supplied are equal. By putting the two curves together, we should be able to find a price at which the quantity buyers are willing and able to purchase equals the quantity sellers will offer for sale.įigure 3.7 “The Determination of Equilibrium Price and Quantity” combines the demand and supply data introduced in Figure 3.1 “A Demand Schedule and a Demand Curve” and Figure 3.4 “A Supply Schedule and a Supply Curve”. The supply curve shows the quantities that sellers will offer for sale at each price during that same period. The demand curve shows the quantities of a particular good or service that buyers will be willing and able to purchase at each price during a specified period. The logic of the model of demand and supply is simple.
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