Supply and Demand Equilibrium

By Jodi Beggs, About.com Guide

Since any price below the equilibrium price P* results in upward pressure on prices and any price above the equilibrium price P* results in downward pressure on prices, it should not be surprising that the only sustainable price in a market is the P* at the intersection of supply and demand. This price is sustainable because, at P*, the quantity demanded by consumers is equal to the quantity supplied by producers, so everyone who wants to buy the good at the prevailing market price can do so and there is none of the good left over.

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• Supply and Demand Equilibrium
• Market Forces Result in Economic Equilibrium
• Market Forces Result in Economic Equilibrium
• Only One Price in a Market Is Sustainable
• The Condition for Market Equilibrium
• Markets Are Not Always in Equilibrium

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