Supply & Demand
How price signals coordinate buyers and sellers.
Market Type
Ideal Market
Commodity Markets, Agricultural Produce
5-10% of world economy
What do these lines mean?
Demand
Supply
P* = 45.0 · Q* = 58.3
Click the axis maximum values to change the chart range.
Market Equilibrium
The curves intersect at P* = 45, Q* = 58. At this price, the quantity producers wish to sell exactly equals what consumers wish to buy — no unsatisfied buyer, no unsold stock. Prices above equilibrium create surpluses that push prices back down; prices below create shortages that push them back up. The steepness of each curve reflects elasticity: a steeper curve means that side of the market responds less to price changes, typically because good substitutes are scarce.