Equilibrium of Demand And Supply After discussing the concepts of demand and supply, we focus now on the interaction of demand and supply. Forces of demand and supply are very important to determine the price of the commodity in the market. "Equilibrium of demand and supply is that situation where the demand of a good is equal to its supply." Qd = Qs Infect the equilibrium of demand and supply is achieved in perfect competition, where prices are flexible. When demand is more than supply, price will start to increase until both forces become equal. Similarly when supply is more than demand, price will start to decrease until supply becomes equal to demand. At this position of equilibrium of demand and supply, price determined, is equilibrium price and quantity is equilibrium quantity. Now we explain it with the help of schedule and diagram. P (Rs) Qd (Kg) Qs (Kg) 2 50 10 4 40 20 6 30 30 8 20 40 10 10 50 With the help of table, demand and supply curves are drawn. They are intersecting each other at point "E". Where, Qd = Qs = 30 and p = 6