equilibrium price

In economics, the equilibrium price is the price at which the quantity of a commodity that producers wish to sell equals the quantity that consumers wish to buy. This price is determined by the interaction of supply and demand in a market.12

The demand curve illustrates the relationship between price and the quantity consumers are willing to purchase, typically sloping downward. The supply curve shows the relationship between price and the quantity producers are willing to offer, usually sloping upward.2

When the quantity supplied matches the quantity demanded, the market reaches equilibrium. This balance is achieved through the price mechanism, where buyers and sellers negotiate until a mutually agreeable price is found. This process of determining a price where both parties feel the transaction is worthwhile is known as price discovery.23