Supply and demand in the market
. All those who are willing and able to sell that good at some price are part of the market supply . Total market demand or supply is the sum of individual demands or supplies . Supply and demand curves illustrate how the quantity demanded or supplied changes in response to a change in the price of that good, if nothing else changes /ceteris paribus/ . Demand curves slope downward; supply curves slope upward . The quantity of goods or resources actually exchanged in each market will depend on the behavior of all buyers and sellers, as summarized in market supply and demand curves . At the point where the two curves intersect, an equilibrium price – the price at which the quantity demanded equals the quantity supplied – will be established . A distinctive feature of the equilibrium price and quantity is that it is the only price – quantity combination that is acceptable to buyers and sellers alike . At higher prices, sellers supply more than buyers are willing to purchase /a market surplus/; at lower prices, the amount demanded exceeds the quantity supplied / a market shortage/ . Only the equilibrium price clears the market .