MARKET EQUILIBRIUM
Equilibrium in a market happens when the quantity of a product that buyers want to buy equals the quantity that sellers want to sell.
At this point, the price at which buyers buy and sellers sell is called the equilibrium price, and the quantity bought and sold is the equilibrium quantity.
Excess demand occurs when the quantity buyers want to buy is greater than the quantity sellers want to sell at a certain price.
When there is excess demand, buyers are willing to pay more to get the product, driving the price up. As the price increases, buyers buy less, and sellers sell more until equilibrium is reached again.
Excess supply occurs when the quantity sellers want to sell is greater than the quantity buyers want to buy at a certain price.