Tuesday, January 12, 2010

Market equilibrium

At every moment, some people are buying while the others are selling firms are inventing new products while governments are passing laws to regulate old ones; foreign companies are opening plants in America while American firms are selling their product abroad. Yet in the midst of all this turmoil, Markets are constantly solving the what, how, And for whom. As they balance all the forces operating on the economy, Markets are finding a market equilibrium of supply and demand.
A market equilibrium represents a balance among all the buyers and sellers. Depending upon the price, household and form all want to buy or sell different quantities. the market finds the equilibrium price that simultaneously meets the desire of buyers and sellers. Too high a price would mean a glut of goods with too much output; too low a price would produce long lines in stores and a deficiency of goods. those prices for which buyers desire to buy exactly the quantity that seller desire to sell yield on equilibrium, of supply and demand.

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