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Welcome. Equalibrium Price. Equilibrium. Equilibrium: 1. a state of rest or balance due to the equal action of opposing forces. 2. equal balance between any powers, influences,

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  1. Welcome

  2. Equalibrium Price

  3. Equilibrium Equilibrium: 1. a state of rest or balance due to the equal action of opposing forces. 2. equal balance between any powers, influences, In a market an equilibrium is said to exist when the forces of supply [sellers] and demand [buyers] are in balance: the actions of sellers and buyers are coordinated. The quantity supplied equals the quantity demanded!

  4. What is the meaning of Demand ? • It refers different quantities which consumers are willing and able to purchase at different possible prices in a period of time.

  5. Example

  6. Meaning of supply It Refers different quantities of a commodity that producers are willing to sale at different possible prices.

  7. Example 1 50 2 40 3 30 20 4 5 10

  8. Determination of equilibrium price It is determined by the market forces demand for and supply of the commodity

  9. price R1 Dcd R2 Demand Demand curve As the price increses The qty demanded decreses F1 F2

  10. supply curve F $3 supply $1 S /ut 2 4 6 8 10 12 14 16 There is direct relation between price and supply of commodity

  11. Supply 10 f.Ex rate 9 8 $7 70 6 5 4 3 2 Demand 1 10 20 30 40 50 60 70 80 90 100 110 120 130 60 Q , Where the Demand for and supply of is equal There the equl. Price and qty will be determined. At the equilibrium price , the qty supplied is equal to the qty demanded.

  12. THE END

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