The equilibrium price is where the supply of goods matches demand.

P is the equilibrium price.

**Formula to calculate equilibrium price.**

If for instance your given the supply function and the demand function, and we know that an equilibrium price is only reached when quantity supplied is equal to quantity demanded, we can easily solve for the equilibrium price.

**Example:**

Suppose the Supply function is Qs = 40P and the demand function is Qd = 1,000 – 60P. Find the equilibrium price.

Therefore, the equilibrium price is $ 10.