Answer:
The market equilibrium occurs where the quantity supplied by producers is equal to the quantity demanded by consumers. This is the point at which the market clears, and there is no excess supply or demand.
Graphically, equilibrium is shown where the supply and demand curves intersect. This point is known as the equilibrium price and quantity.
Recently, I wanted to purchase a popular video game console, but it was sold out everywhere. Many stores were selling the console at a higher price than its retail price due to the high demand and low supply.
The market was out of equilibrium because the demand for the console was greater than the supply. This caused an excess demand for the console, leading to shortages and higher prices. To bring the market back to equilibrium, either the supply of the console needs to increase or the demand needs to decrease. In this case, the console manufacturer needed to produce more consoles to meet the demand, or the retailers needed to limit the number of consoles each customer could purchase to prevent hoarding and scalping.
Step-by-step explanation: