Section 21.When buyers and sellers agree is called market equilibrium. Equilibrium price is whenthe buyers and sellers agree on the price of a product and there is enough supply anddemand for that certain product. Equilibrium quantity is when there is enough product forwhat the consumers want to buy.2.In a competitive free market, the law of supply and the law of demand will together push the priceof a good or service to a level where the quantity demanded and the quantity supplied are equal.3.Section 3The time it takes for producers to change prices to match consumer demands variesSection 5:Quantity SuppliedQuantity DemandedEquilibriumpointPrice=toolowExcessDemandLessprofitforownersShortagePrice=ToohighLessDemandQuantity isGreaterSurplus orExcessSupply
1. Prices Convey Information to Consumers and Producers:To consumers, price signals theopportunity cost of a purchase, and producers use prices to appeal to the consumers they hope will buytheir product.