Question

What does it mean to reach an equilibrium price?

Answer 1

when the amount of goods supplied is equal to the amount of demand we can attain the equilibrium price.

Explanation:

• when the number of goods supplied is equal to the demand then there will be a proper cycle flow of goods according to the demand so the price will meet an equilibrium stage.  

• when the number of goods supplied is more than the demand the material will be losing its equilibrium price which in turn affects the supplier and so there is a chance to stop production.

• when the number of goods supplied less to the amount of demand there exists the demand which hampers the price to stay equilibrium, in turn, it will also encourage hoarding.