Market clearing price is the equilibrium price where the quantity demand equals the quantity supplied.
Market clearing price is otherwise known as Equilibrium price.
- In a situation where the plans of buyers and plans of sellers agrees in the market, the price is at equilibrium.
- When an amount demanded by consumers equals the amount supplied by firms, then market clearing occurs in the market.
- On graph, the point of Marketing clearing is determined by finding the point of intersection of the plotted supply and demand curve.
In conclusion, the market clearing price is determined by the interplay of supply and demand.
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