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Economics

The Fundamentals of Supply and Demand Equilibrium

Quick fact

The equilibrium price of a good is not set by any single person or institution — it emerges from the independent, decentralized decisions of thousands of buyers and sellers, each pursuing their own self-interest, converging to a point where the quantity supplied exactly equals the quantity demanded.

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You've probably noticed that when more people want something, like a hot new toy, the price tends to go up. But why exactly does that happen, and how does the market decide on the 'right' price?

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The Fundamentals of Supply and Demand Equilibrium

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