Figure 3-7 The Equilibrium Price of Apples
Long-Run Equilibrium
The table in Figure 3-7 brings together the demand and supply
schedules from Figures 3-1 and 3-5. The quantities of apples
demanded and supplied at each price can now be compared.
The equilibrium price corresponds to the intersection of the demand
and supply curves. At any price above $60, there is excess supply and
thus downward pressure on price. At any price below $60, there is excess
demand and thus upward pressure on price. Only at a price of $60 is
there no pressure for price to change. Equilibrium occurs at point E, at a
price of $60 per bushel and quantity exchanged equal to 65 000 bushels.
There is only one price, $60 per bushel, at which the quantity of apples
demanded equals the quantity supplied. At prices less than $60 per