Equilibrium Price : Equilibrium price is the price at which quantity demanded is equal to quantity supplied. The price of the product under perfect competition is influenced by both buyers and sellers and equilibrium price is determined by the interaction of demand and supply forces.
According to Marshall, demand and supply are like two blades of scissors. Just as cutting of cloth is not possible with the use of one blade, the equilibrium price of a commodity cannot be determined, either by the forces of demand or by supply alone. Both together determine the price. We can study this with the help of the following table and graph.
| Price (Rs.) Per unit | Quantity Demanded (Units) | Quantity Supplied (Units |
| 5 | 100 | 500 |
| 4 | 200 | 400 |
| 3 | 300 | 300 |
| 2 | 400 | 200 |
| 1 | 500 | 100 |
E – Equilibrium point
OP – Equilibrium price
OQ – Equilibrium quantity demanded and supplied
