In the basic supply-and-demand model, the equilibrium point is where the supply and demand curves intersect. At that point, the quantity buyers plan to purchase equals the quantity sellers plan to offer. The point has two coordinates: an equilibrium price and an equilibrium quantity.
What the equilibrium point represents
Equilibrium describes a match between buyers’ and sellers’ plans at a particular price. It is not just a price, and it does not mean that supply and demand themselves are identical: quantity supplied equals quantity demanded. OpenStax explains this introductory market model in its Principles of Macroeconomics 3e chapter on demand, supply, and market equilibrium.
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The result is a model of a market under stated conditions, not proof that every real market is continuously at equilibrium. Actual prices and quantities can be affected by conditions that the basic model does not capture.
How to find equilibrium on a graph or in a schedule
On a supply-and-demand graph
Find the intersection of the downward-sloping demand curve and the upward-sloping supply curve. Read the price from the vertical axis and the quantity from the horizontal axis. Together, those coordinates give the equilibrium price and equilibrium quantity.
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In a supply-and-demand schedule
Compare the quantity demanded and quantity supplied at each listed price. The row where those quantities match identifies the equilibrium price; their shared quantity is the equilibrium quantity.
What happens above or below the equilibrium price
| Price in the model | Comparison of planned quantities | Result |
|---|---|---|
| Above equilibrium | Quantity supplied is greater than quantity demanded. | Excess supply, or a surplus. |
| Below equilibrium | Quantity demanded is greater than quantity supplied. | Excess demand, or a shortage. |
In the introductory account, these imbalances put pressure on price to move toward equilibrium. That adjustment depends on prices being able to respond; it is not automatic in every market.
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How price controls can affect adjustment
A price ceiling is a legal limit on how high a price may be. If set below the model’s equilibrium price, it can constrain the usual price adjustment. The Federal Reserve Bank of St. Louis uses rent control as an educational example of this kind of ceiling in its Market Equilibrium episode. The model alone does not establish how large a shortage will be, or what the overall effects of a particular rent policy will be; those depend on the policy and market.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.A textbook example—not a current market estimate
OpenStax’s gasoline illustration gives an equilibrium price of $1.40 per gallon and an equilibrium quantity of 600 million gallons. These figures belong to the textbook example; they are not current gasoline prices or sales statistics.
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