MARKET EQUILIBRIUM (Economics)

EQUILIBRIUM THEORY

Market
A market is a point where seller and buyer meet to make transaction, Economist have argued that a market is not just a geographical location or place, but any were transaction takes place, Market can be visible or invisible.
Production in economics is deriving by two force
*Demand --> consumer
*Supply ---> manufacturer

Demand
Demand is the quantity of a commodity or a service that people are willing or able to buy at a certain price, per unit of time. Demand is based on needs and wants—a consumer may be able to differentiate between a need and a want, but from an economist’s perspective they are the same thing. Demand is also based on ability to pay. If you cannot pay, you have no effective demand.
law of demand states:
the higher the price the lower the quantity demanded while the lower the price the higher the quantity demanded
What a buyer pays for a unit of the specific good or service is called PRICE.
The demand curve is the graph depicting the relationship between the price of a certain commodity and the amount of it that consumers are willing and able to purchase at any given price
note: demand curve slop from left to right as seem below

supply
supply is the amount of something that firms, consumers, labourers, providers of financial assets, or other economic agents are willing to provide to the marketplace. supply can also be said to be the amount of a product per unit of time that producers are willing to sell at various given prices when all other factors are held constant
supply curve is a graphical representation of the relationship between the price of a good or service and the quantity supplied for a given period of time.
supply curve slop from right to left

while demand and supply curve goes opposite directions , the point at which they both meet is called EQUILIBRIUM POINT
see picture below

at the meeting point,the price at which the buyer pay is EQUILIBRIUM PRICE , the quantity of commodities the seller sells is called EQUILIBRIUM QUANTITY , and at the point at which they transact the business is called EQUILIBRIUM MARKET

IMAGE 1,2,3&4
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