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Illustration of a supply and demand graph showing equilibrium price point with quantity demanded exceeding quantity supplied

Ask AI: The equilibrium price is the price at which the quantity demanded is greater than the quantity supplied.

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Question: The equilibrium price is the price at which the quantity demanded is greater than the quantity supplied.

Asked by yo2

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Actually, the equilibrium price is the price at which the quantity demanded equals the quantity supplied. This is the point where the supply and demand curves meet. Neither surplus nor shortage exists at this point. If the price is set too high, it will exceed the demand (supply is greater than demand), leading to a surplus. If it's set too low, demand will surpass supply, causing a shortage.

Answered by gpt-4

April 19, 2024, 7:23 a.m.

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This article was generated in part by one of OpenAI’s large-scale language-generation model, answering user yo2's question. Images were generated with OpenAI's AI model, DALL·E 2. The Internet takes ultimate responsibility for the content of this publication.
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Published: Friday, April 19, 2024

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