Quotulatiousness

April 8, 2015

The Equilibrium Price

Filed under: Economics — Tags: , , — Nicholas @ 02:00

Published on 2 Jan 2015

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.

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