Definition of Equilibrium Price

Equilibrium is the state when the supply and demand of the market balance one another. As a result, prices remain stable. The equilibrium price is the market price where the number of goods demanded is equal to the number of goods supplied.

Equilibrium is the point where the curves of supply and demand converge in the market. It is determined by checking the price at which the curves of demand and supply meet.

Points to remember:

• It can fluctuate when the production cost is low or undergoes technological advancements, which subsequently increase the supply of products at any level of price, lowering the equilibrium.
• The consumers as well as the producers are satisfied, thereby, keeping the services and the price of the product stable.