Civil Engineering Reference
In-Depth Information
Key Points 3.3
❍
When we combine demand and supply curves, we find the equilibrium
price at the intersection of the two curves. At the equilibrium price there is
no tendency to change, the market clears (see
Figure 3.4)
.
❍
Equilibrium exists whenever the separate plans of buyers mesh exactly with
the separate plans of the sellers. Price points the buyers and sellers in the
right direction.
❍
If conditions in the market change, the relevant curve shifts and a new
equilibrium position is established (see
Figure 3.5)
.
❍
Market failures exist, and market distortions form an important
consideration when setting any agenda aimed at achieving sustainability.
