DEMAND AND SUPPLY. MARKET EQUILIBRIUM. PERFORMED BY: KARIMJONOV KOZIMJON ANVAROV JAVOHIR PLAN • • • • • • The law of supply Explanation The law of Demand&Supply Market Equilibrium Market Equilibrium Graph References THE LAW OF SUPPLY • The law of supply and demand is a theory that explains the interaction between the sellers of a resource and the buyers for that resource. The theory defines what effect the relationship between the availability of a particular product and the desire (or demand) for that product has on its price. EXPLANATION MARKET EQUILIBRIUM • Market equilibrium occurs where supply = demand. When the market is in equilibrium, there is no tendency for prices to change. We say the market clearing price has been achieved • A market occurs where buyers and sellers meet to exchange money for goods. • The price mechanism refers to how supply and demand interact to set the market price and amount of goods sold • At most prices planned demand does not equal planned supply. This is a state of disequilibrium because there is either a shortage or surplus and firms have an incentive to change the price. MARKET EQUILIBRIUM GRAPH • Market equilibrium can be shown using supply and demand diagrams • In the diagram below, the equilibrium price is P1. The equilibrium quantity is Q1. REFERENCES • https://www.investopedia.com/terms/l/law-ofsupply-demand.asp • https://www.google.com/search?q=demand+and +supply+theory&source=lnms&tbm=isch&sa=X&ved =0ahUKEwjI7a3x9d7lAhXuy6YKHW80C9IQ_AUIEigB& biw=1600&bih=740 • https://www.economicshelp.org/microessays/equili brium/market-equilibrium/