Economics Made Economical

Vocabulary Term of the Day #1: Equilibrium

The Economic Equilibrium point is the point on a price vs. quantity graph where the Supply Curve and Demand Curve intersect. The market for a given product can produce Q units of that product and sell them at a price of P, where point (Q, P) is the equilibrium point. If the suppliers produce Q units and sell them for P, the entire supply will be sold and the entire demand for the good at that price will be met.




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