Equilibrium Quantity

Equilibrium is an economist’s best friend (unless they have a dog).

Equilibrium is where supply and demand are equal (you know, that point on the graph where the two lines cross). If a market is at equilibrium, it means consumers are buying the same amount of goods as firms are producing, and at the same price.

If consumers weren’t buying up all the supply, it means there’s a surplus of supply. On the other hand, if they bought up all the supply and want more, there’s a shortage. In equilibrium, there are no shortages or surplus issues...everything is just right.

Equilibrium quantity is the quantity that suppliers are supplying and buyers are buying at the equilibrium price. Where there’s an equilibrium quantity, there’s neither a shortage or supply at the price the good is being sold for. That makes equilibrium quantity a special, special quantity...a true special snowflake out of all the other quantities on a supply and demand graph. Shhhh...don’t tell the other quantities.