Final answer:
The equilibrium price of a product constantly changes due to economic conditions, availability of resources, and competition. These factors influence supply and demand, causing the market to adjust to a new balance, reflected in changing prices and quantities.
Step-by-step explanation:
The factors that contribute to the constant change in a product's equilibrium price include economic conditions, availability of resources, and degree of competition. These factors directly impact supply and demand, leading to shifts in equilibrium. For instance, a rise in consumer income can increase demand for a product, raising its equilibrium price. Similarly, an increase in the price of raw materials can decrease supply, also affecting the equilibrium price. Furthermore, competition can lead to price adjustments as firms vie for market shares. Price elasticity of demand influences how consumers respond to these price changes, with luxuries being more sensitive to price changes than necessities.
All these components are dynamic and can change quickly, so the equilibrium price and quantity are in a constant state of flux as they move towards a new balance after each shift. If the price is higher or lower than the equilibrium, market forces will typically correct it, causing an excess supply (surplus) or excess demand (shortage), respectively, until it reaches a new equilibrium.