essence of equilibrium in the market is that in this state, this can be considered a balanced market, that is neither buyers nor sellers have no desire on its part to break the existing balance.The equilibrium price - the point at which the interests of the parties are the same.In other words, the balance - a situation where at a particular price demand equals supply.
Undoubtedly, the economic value of that impact on the price of certain goods in the course of economic activity are continually changing.For this reason, the equilibrium price dynamics can occur only in rare cases, can only be achieved for a short period of time.The reasons for these changes may be a change in income, the introduction of new technologies, changes in taste, fashion, increase or decrease in the prices of various factors of production.If these values begin to change, shifting the supply and demand curves to the left or right, respectively, changed the market equilibrium and the equilibrium price.
functions equilibrium price
· Information.
· Distribution.
· Balancing.
· Stimulating.
· standardized.
stable equilibrium
market, off-balance, could some time to return to this state or not to return.Here we are faced with the problem of stability or stability of equilibrium.
stable equilibrium - is the ability of the market returns to equilibrium under the influence of external factors only.In the event that the balance in the market is stable, then the additional regulation is not mandatory, it is the market itself is able to maintain a balance.And if the market lacks stability property, then it becomes necessary regulation.
main means of state influence on the market are: subsidies, taxes, fixed prices or fixed volumes of goods.The most gentle and appropriate way to regulate the market mechanism is taxation.Taxes do not change the flow conditions of market processes do not interfere with the freedom of action of market participants.
deviations from the equilibrium price
possible any exact equilibrium price, or a deviation from the equilibrium state.Market equilibrium exists in the case where there is no possibility for changing the number of products sold or market price.
The market price is established on the market automatically.This process was named Adam Smith mechanism for the "invisible hand."The price increase in demand compared with the price proposal will facilitate reallocation of certain resources to the market with a more effective demand.
Overpriced may be an indication of the relative scarcity of goods, prompting producers to increase production and meet the needs of customers.Since the equilibrium price can greatly exceed the costs of producers whose costs are below the market average, such a state will help to shift resources to the best manufacturers, which will increase the overall efficiency of the economy.
However, consumers are not always happy with the equilibrium prices.Public anger forms the ground for active state intervention in the pricing process.
In practice, government intervention, as already noted, can translate into the establishment of minimum or maximum prices.If the minimum price, which was established by the state, will be below the equilibrium, there is a deficiency, and if at least higher than the equilibrium price, a surplus of goods produced.
