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(Laiba) MARKET EQUILIBRIUM
(Laiba) MARKET EQUILIBRIUM
DEFINITION: In simple words, market equilibrium is nothing but the intersecting point of the supply
and demand curve in the equilibrium graph. Which means when the previously mentioned curves
are equal. Basically in this case there is very less tendency for changes in price at this situation.
(i) I have attached the graph of the market equlibrium of icecream below.
(iii) For Rs.40 there should be 400 bottles supply whereas the actual supply is 300 bottles which
is shortage
For Rs.120 there should be 1200 bottles supply and the actual supply is also 1200 bottles,
therefore there is neither shortage or surplus.
(iv) The maximum price consumer is willing to pay for 1500 bottles is Rs. 60.
(v) The minimum price the producer is willing to accept for 1500 bottles is Rs.140.