In market equilibrium analysis, the point where the quantity demanded equals the quantity supplied is known as the __________.

In market equilibrium analysis, the point where the quantity demanded equals the quantity supplied is known as the equilibrium point. At this point the market is balanced, so buyers want exactly as many goods as sellers are willing to offer, and no pressure pushes the price up or down. To find it, economists set the demand equation equal to the supply equation and solve for price and quantity. For example, if demand is Qd = 100 – 2P and supply is Qs = 20 + 3P, setting them equal gives 100 – 2P = 20 + 3P, which solves to P = 12 and Q = 64, the equilibrium price and quantity. This equilibrium price keeps the market stable until an external change shifts the curves.