Economics, 3rd Edition

The Equilibrium of Supply and 

Demand

The equilibrium is found where the 

supply and demand curves intersect. 

At the equilibrium price, the quantity 

supplied is the same as the quantity 

demanded. Here the equilibrium price 

is 

€0.40 per litre of milk: at this price, 

sellers are willing to offer 7,000  litres 

of milk for sale and buyers wish to 

purchase 7,000  litres of milk.

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FIGURE 3.7

0.40

0

1

2

3

4

5

6

7

8

9

10

11 12 13

Price of milk

per litre (

€)

Quantity of milk bought and

sold (thousands of litres)

Equilibrium

quantity

Equilibrium

Demand

Supply

Equilibrium price

The market will remain in equilibrium until something causes either a shift in the demand curve or a 

shift in the supply curve (or both). If one or both curves shift, at the existing equilibrium price, there will 

now be either a