E.2.6.



Demonstrate how supply and demand determine equilibrium price and quantity in the product, resource, and financial markets.

 * Supply** is the amount of a product that is available.
 * Demand** is the amount of a product that is desired by the consumers.

Supply and Demand are important obtaining an equilibrium price. The **equilibrium price** is the price at which the supply is equal to the demand. This allows the seller to sell as much product as possible without having too much unsold product left over, or worse yet, having not enough product to meet consumer needs.

The **equilibrium quantity** is the amount of a product that is supplied by the seller or demnaded by the consumer at the equilibrium price. This again helps meet the amounts determined by supply and demand.

http://www.socialstudiesforkids.com/articles/economics/supplyanddemand1.htm http://www.investorwords.com/1723/equilibrium_price.html http://www.investorwords.com/6800/equilibrium_quantity.html