How is the equilibrium price determined under
perfect competition?
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In perfect competition, the price of a product is determined at a point at which the demand and supply curve intersect each other. This point is known as equilibrium point as well as the price is known as equilibrium price. In addition, at this point, the quantity demanded and supplied is called equilibrium quantity.
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perfect competition, the price of a product is determined at a point at which the demand and supply curve intersect each other. This point is known as equilibrium point as well as the price is known as equilibrium price. In addition, at this point, the quantity demanded and supplied is called equilibrium quantity. In economic terms, an industry consists of many independent firms. Each firm has a number of factories, farms or mines, as required. Each such firm in industry produces a homogeneous product. Equilibrium of the industry happens when the total output of the industry is equal to the total demand. In such a scenario, the prevailing price of a commodity is its equilibrium price.
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