Market Equilibrium Calculator
Find equilibrium price and quantity from linear supply and demand equations.
See what happens when supply or demand shifts.
Supply and Demand Equilibrium In a competitive market, equilibrium is the price at which the quantity supplied equals the quantity demanded. At this price there is no surplus and no shortage.
Linear Equations This calculator uses linear (straight-line) supply and demand functions:
- Demand: Qd = a - b*P (quantity falls as price rises)
- Supply: Qs = c + d*P (quantity rises as price rises) Setting Qd = Qs and solving for P gives the equilibrium price. Substituting back gives equilibrium quantity.
Shifts in Supply and Demand A shift moves the entire curve. A demand increase (more buyers, higher incomes) raises both price and quantity. A supply increase (better technology, more producers) lowers price and raises quantity. The calculator lets you apply a shift to see the new equilibrium.
Surplus and Shortage At any price above equilibrium: surplus (Qs > Qd) — sellers compete and price falls back. At any price below equilibrium: shortage (Qd > Qs) — buyers compete and price rises back. Only at equilibrium does the market clear.