<span>Consider this scenario: in response to an increase in the product's price, producers of mp3 players have increased the quantity supplied. this is an example of Law of Supply. </span><span>The </span>law of supply<span> states that the quantity of a good supplied rises as the market price rises, and falls as the price falls. </span>
Answer
Before I answer this question, you must note that the equilibrium price is created by both the amount supplied of a certain product as well as how much "customers" there are (or the amount that is bought in all). This however, is usually not taking account any potential competitors.
For example, let say that the price in creating the product (or buying) is $15. This means that right now, the company loses $15 for one of the products. To make a profit, the selling price must be >$15. However, (unless they are a monopoly, such as, for example, electrical companies) there are competitors that they must fight with to get customers. Of course, there are other things that can affect the price, depending on the demographic and area.
So how does supply and demand affect the equilibrium price? The limits of the supply & the amount of demand would help determine the price by the amount of people buying and the supply of the product.
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