MARKET EQUILIBRIUM. When the supply and demand curves intersect, the market is in equilibrium. This is where the quantity demanded and quantity supplied are equal. The corresponding price is the equilibrium price or market-clearing price, the quantity is the equilibrium quantity.

What causes quantity demanded to be equal to quantity supplied?

When the quantity demanded equals the quantity supplied—when buyers' and sellers' plans are consistent. The price at which the quantity demanded equals the quantity supplied. The quantity bought and sold at the equilibrium price. Figure 4.9 shows the equilibrium price and equilibrium quantity.

What is is called when quantity supplied is more than quantity demanded?

A shortage occurs when the quantity demanded is greater than the quantity supplied. A surplus occurs when the quantity supplied is greater than the quantity demanded. For example, say at a price of $2.00 per bar, 100 chocolate bars are demanded and 500 are supplied.