In markets prices move toward equilibrium because of? In markets prices move toward equilibrium because of the fundamental economic concept of supply and demand. The law of supply and demand states that the price of a product or service will be determined by the balance between the amount of supply that producers are willing and … Read more

Another term for equilibrium price is market-clearing price. The term “market-clearing” refers to the idea that at this price, the quantity of a good or service supplied by producers is equal to the quantity demanded by consumers, thereby “clearing” the market. At this point, there is no excess supply or demand, and the market is … Read more