• Deprecated function: Optional parameter $path declared before required parameter $arg is implicitly treated as a required parameter in include_once() (line 1439 of /var/www/quickstart.cals.arizona.edu/includes/bootstrap.inc).
  • Deprecated function: http_build_query(): Passing null to parameter #2 ($numeric_prefix) of type string is deprecated in media_oembed_default_callback() (line 64 of /var/www/quickstart.cals.arizona.edu/profiles/ua_quickstart/modules/contrib/media_oembed/plugins/providers/default.inc).

The Equilibrium Price

In this lesson, we investigate how prices reach equilibrium and how the market works like an invisible hand coordinating economic activity. At equilibrium, the price is stable and gains from trade are maximized. When the price is not at equilibrium, a shortage or a surplus occurs. The equilibrium price is the result of competition amongst buyers and sellers.