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08 March 2018

Graphically prove that, at the Equilibrium Point - Demand = Supply




Market equilibrium: Market is an arrangement through which buyers and sellers contact each other to do transaction Consumers bring demand to the market for buying goods to satisfy their goods to the market to sell them and earn profits.

How the market demand and supply determine prices and quantities exchange are illustrated in table-1 and which has also been graphically show in fig-1
Price (tk)
Qd
Qs
Surplus(+)
Supplied(-)
10
200
400
+200
9
300
300
Market clears
8
400
200
-200
Table-1:



Explanation: From the table-1 and fig-1 we see that at price 9 tk quantity demand equals quantity supplied. Thus at price 9 tk the forces of demand and balanced. Price of tk 9 at which quantity demand equals quantity supplied is called the equilibrium price and quantity of this good equals to 300, at this equilibrium price is called the equilibrium quantity 





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