What is Equilibrium price

The equilibrium price is the price “agreed” between producers and consumers.

The “agreement” is attained by means of market forces, and not as a result of negotiations between them.

The “agreement” is reached when the unit price which consumers are prepared to pay for the purchase of a given quantity of goods is equal the unit price which the producers are willing to accept for the sale of the same quantity. In fact the equilibrium price is the point of intersection between the supply curve and the demand curve for the product.