Market Equilibrium Calculator

Where P = 100 − 2Q meets P = 20 + 3Q: 16 units at $68

Market equilibrium is the one price–quantity combination at which quantity demanded equals quantity supplied — no shortage, no surplus, and no pressure for the price to rise or fall. Finding it means setting the demand price equal to the supply price. For linear curves P = a − bQ and P = c + dQ that gives Q* = (a − c) ÷ (b + d), and substituting back gives P* = a − bQ*. Enter demand P = 100 − 2Q and supply P = 20 + 3Q and the lab returns Q* = (100 − 20) ÷ (2 + 3) = 80 ÷ 5 = 16 units, at P* = 100 − 2 × 16 = $68. If your two curves never cross at a positive quantity, the calculator floors quantity at zero rather than reporting a negative market.

That $68 is the market-clearing price: every buyer willing to pay it finds a seller, and every seller willing to accept it finds a buyer. Name any other price and the market answers back. Below $68 buyers want more than sellers offer, and the shortage bids the price up; above $68 sellers offer more than buyers want, and the surplus pushes it down. Equilibrium is the only price on the whole line with no built-in pressure to move.

$256 to buyers, $384 to sellers: why no other price beats $640

The graph shades two triangles at that crossing point. Consumer surplusThe gap between the most a buyer would pay for something and the price they actually pay. is the value buyers receive above the price they actually pay; producer surplusThe gap between the price a seller receives and the lowest price they would have accepted. is the value sellers receive above their minimum acceptable price. Both are computed next to P* and Q*, not merely drawn. At the $68 equilibrium, consumer surplus = ½ × (100 − 68) × 16 = $256 and producer surplus = ½ × (68 − 20) × 16 = $384.

Together they make total surplus of $640, the gains from trade — and $640 is the most this pair of curves can produce. Any price other than $68 trades fewer units and leaves part of that $640 unclaimed, which is why the competitive equilibrium is called the efficient outcome and not merely the stable one. It is also the canonical case the engine and the 15-sheet Excel workbook are validated against on every change, so the figures on screen and the figures in the workbook agree by construction.

A $10 tax lands 40% on buyers and 60% on sellers, whoever remits it

Who bears a per-unit tax is decided by relative elasticity, not by who legally remits it — the most counter-intuitive result on this page. With linear slopes, buyers bear b ÷ (b + d) and sellers bear d ÷ (b + d): the steeper, more inelastic side carries the larger share because it is the side less able to walk away. Demand here is flatter than supply (b = 2, d = 3), so a $10 per-unit tax splits as 2 ÷ 5 = 40% onto buyers and 3 ÷ 5 = 60% onto sellers.

The same tax shrinks quantity from 16 toward 14, and those lost units are deadweight loss: mutually beneficial trades that no longer happen because the policy holds quantity away from the efficient level. On a linear diagram it is the triangle between the supply and demand curves over the units that stop trading — about $10 of surplus here, destroyed rather than transferred, captured by nobody, neither the government nor either side of the market.

A ceiling only bites below $68; a floor only above it

A price ceiling has an effect only when it is set below the equilibrium price, where it creates a shortage. A price floor has an effect only when it is set above the equilibrium price, where it creates a surplus. A ceiling above $68, or a floor below it, changes nothing at all: the market clears normally, and the module reports that rather than inventing a quantity. When a control does bind, the deadweight-loss triangle reappears, because holding the price away from $68 blocks units that both sides wanted to trade.

A shift moves the crossing point itself instead of fighting it, and the two directions behave differently: demand up raises both price and quantity, while supply up lowers the price but raises the quantity. The shift simulator lays that out as a four-step before/after comparison, so you can see which of the two coordinates actually moved and by how much — the test that separates a demand story from a supply one.

The row where quantity demanded and quantity supplied finally meet

The classroom way to find an equilibrium price is a table, not algebra: list quantity demanded and quantity supplied at each price, then scan for the row where the two match, or come closest. The accessible schedule on this page builds exactly that for whatever curves you enter, row by row, and the hover read-out on the graph does the same at any quantity — demand price, supply price, and the shortage or surplus between them.

The rows around the answer matter more than the matching row. Every price below $68 shows excess demand, every price above it shows excess supply, and the gap narrows as the rows close in on the crossing point. That column of shrinking gaps is the market signal itself: a shortage bids the price up, a surplus pushes it down, and both stop only where the gap reaches zero. Scenario comparison, copy, and CSV export carry the same rows out of the page.

Where two straight lines stop describing a real market

Every figure above is exact for a market made of two straight lines. That is the model, and its limitations are structural rather than defects — so here is what it cannot do.

• Demand and supply are assumed linear over the relevant range; real schedules can bend, kink, or shift.
• It models a single competitive market in isolation, ignoring related markets, expectations, and time lags in adjustment.
• Surplus, deadweight loss, and incidence are exact only for the linear model; they approximate curved real-world curves.
• It does not forecast real prices: this is an idealised single market, and two straight lines cannot reproduce the frictions, expectations, and shocks that move actual ones.

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Read the guide

There is no dedicated market equilibrium guide yet. For a deeper, two-point elasticity treatment, see the price elasticity of demand calculator.

Sources and methodology

This page solves an idealised linear supply-and-demand model from the coefficients you enter - no live prices, quantities, elasticities or tax rates are fetched. Equilibrium, consumer and producer surplus, deadweight loss and tax incidence are standard microeconomic models taught in the references below, not figures set by any government or regulator. The price series is included as a real-world contrast to the straight lines, not as an input. Links open in a new tab.

• Principles of Economics 3e, 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services - the definition of equilibrium as the price and quantity where quantity demanded equals quantity supplied, which is what this page solves as Q* = (a - c) / (b + d)OpenStax (Rice University) · verified 2026-09-01
• Principles of Economics 3e, 3.5 Demand, Supply, and Efficiency - consumer surplus, producer surplus and deadweight loss as the welfare triangles this page shades on the graph and reports numericallyOpenStax (Rice University) · verified 2026-09-01
• Principles of Economics 3e, 3.4 Price Ceilings and Price Floors - the binding test and the resulting shortage or surplus that the price-control module on this page reportsOpenStax (Rice University) · verified 2026-09-01
• Principles of Economics 3e, 5.3 Elasticity and Pricing, section Elasticity and Tax Incidence - the result that a per-unit tax is borne according to relative elasticity rather than by whoever remits it, which is the basis for the buyers-bear b / (b + d) split in the tax moduleOpenStax (Rice University) · verified 2026-09-01
• Principles of Microeconomics 14.01SC, Unit 1: Supply and Demand - the university course unit covering supply, demand and elasticity, the framework behind the shift simulator and the point-elasticity read-out at equilibriumMIT OpenCourseWare (Massachusetts Institute of Technology) · verified 2026-09-01
• Gasoline and Diesel Fuel Update - an official weekly price series for a real market, shown here as a contrast: actual prices move in ways two straight lines cannot reproduce, which is why this model is a teaching tool and not a forecastU.S. Energy Information Administration (EIA) · verified 2026-09-01