The price of complements. A rise in the price of complements will decrease the demand for a college education. The number of buyers. When the baby boom finished high school, the demand for college went higher. Illustrate graphically and explain market equilibrium.
Market equilibrium occurs at the intersection of the demand and supply curves.
At the equilibrium price the quantity demanded equals the quantity supplied. Markets respond to below equilibrium prices by adjusting the price upward. There is a shortage of the good when the price is below the equilibrium price. The quantity demanded exceeds the quantity supplied and the unsatisfied buyers bid the price up. The market effects of an increase in demand is a higher equilibrium price and a higher equilibrium quantity.