Question

regarding the equilibrium price of supply and demand for a single product, explain the forces which propel equilibrium back to the intersection of the two schedules or curves if the price is too high

Answer 1

The equilibrium price is the price at which the quantity demanded equals the quantity supplied. It is determined by the intersection of the demand and supply curves. A surplus exists if the quantity of a good or service supplied exceeds the quantity demanded at the current price and it causes downward pressure on price. A shortage exists if the quantity of a good or service demanded exceeds the quantity supplied at the current price; it causes upward pressure on price.

Equilibrium is achieved at the price at which quantities demanded and supplied are equal, hence when prices are too high there should be a balance in the demand ans supply of product and if product are not demanded at a market then the supply should also to be reduced accordingly. finally if both supply and demand tallies there will ba a point if equilibrium.