In a perfectly competitive market, how is the equilibrium price determined?

In a perfectly competitive market, the equilibrium price is determined by the interaction of supply and demand. When consumers want to buy a product, they create demand, while producers supply that product to the market. The equilibrium price is reached when the quantity of the product that consumers want to buy equals the quantity that producers want to sell. For example, if many people want to buy apples at $1 each, but farmers are willing to sell only a few, the price might rise to $1. 50 until enough apples are available to satisfy everyone.