Supply & Demand Equilibrium Calculator
Market equilibrium price.
Calculate the supply-and-demand equilibrium price and quantity from linear demand and supply functions — where the two lines actually cross.
What this tool does
This calculator models a linear supply-and-demand market by finding the equilibrium price and quantity—the point where supply and demand curves intersect. You input the demand intercept and slope, along with the supply intercept and slope. The tool then solves for the market-clearing price and the corresponding quantity traded at that price. The result shows where neither excess supply nor excess demand exists in the model. The equilibrium price is most sensitive to changes in the intercept values, which shift where each curve begins. A typical scenario involves analyzing how a product's market price might settle given fixed consumer demand patterns and producer supply conditions. Note that this models a simplified linear market; real markets involve many variables not captured here, and results are for educational illustration of economic principles.
Quick answer: with the default values, the result is $100.00 (Equilibrium Price). Adjust the values below for your own figures.
Enter Values
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Formula Used
Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Supply and demand equilibrium is where supply curve meets demand curve - the price and quantity where market clears. Using linear models: demand = a + b×price (downward sloping, b negative), supply = c + d×price (upward sloping, d positive). Equilibrium price = (a - c) ÷ (d - b). Classic microeconomics made calculable.
Demand: Q = 1000 - 5P (1000 intercept, -5 slope). Supply: Q = 200 + 3P (200 intercept, +3 slope). Equilibrium: P = (1000 - 200) ÷ (3 - (-5)) = 800 ÷ 8 = 100. Quantity: 1000 - 5(100) = 500 units. At 100, 500 units demanded = 500 supplied. Market clears.
Real-world application: pricing new products. If you can estimate demand response to price (from surveys or historical data) and supply costs at different volumes, equilibrium analysis identifies the price point that maximizes throughput. Monopolists price above equilibrium (restricting supply for higher margins); competitive markets trend toward it.
A worked example
With the defaults: demand intercept of 1,000, demand slope of -5, supply intercept of 200, supply slope of 3. The tool returns 100.00.
What moves the number most
The result responds to Demand Intercept, Demand Slope, Supply Intercept, and Supply Slope.
The formula behind this
Set demand = supply: a + bP = c + dP. Solve for P = (a - c) ÷ (d - b). Q = a + bP.
Demand: Q = 1,000 + -5P. Supply: Q = 200 + 3P = $100.00.
Inputs
| Equilibrium Quantity | 500 |
|---|---|
| Demand at Eq | 500 |
| Supply at Eq | 500 |
| Market Clears | Yes |
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
This calculator determines the market equilibrium price and quantity by setting aggregate demand equal to aggregate supply. The demand curve is modeled as a linear function with an intercept and slope, as is the supply curve. The calculator solves for the price at which quantity demanded equals quantity supplied by rearranging the equilibrium condition and isolating price, then computes the corresponding equilibrium quantity using the demand function. The model assumes both demand and supply respond linearly to price changes, that markets clear instantaneously, and that no external factors such as taxes, subsidies, or transaction costs affect the outcome. It does not account for dynamic adjustments, consumer or producer surplus calculations, or shifts in underlying market conditions.
References
Frequently Asked Questions
Real-world use?
Linear models accurate?
What shifts curves?
Monopoly vs competitive?
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