Browse Definitions :
Definition

equilibrium price

An equilibrium price, also known as a market-clearing price, is the consumer cost assigned to some product or service such that supply and demand are equal, or close to equal. The manufacturer or vendor can sell all the units they want to move and the customer can access all the units they want to buy.

Dynamic pricing seeks to find equilibrium prices in response to marketplace changes, adjusting prices on the fly in response to supply and demand fluctuations. Other models, such as value-based pricing, seek to capitalize on intangible qualities or employ various tactics to manipulate demand and achieve a higher profit margin than calculated what can be realized through cost-based pricing.

Equilibrium prices tend to remain stable but events that affect supply and demand inevitably affect prices as well. Cost increases for raw materials, for example, may mean that a manufacturer cannot produce the same product without increasing prices or cutting into the profit margin. The result may be that the manufacturer produces fewer units and charges a higher price. Fewer consumers may purchase at the higher price but, because fewer units are available, an equilibrium price may be reached.

This was last updated in August 2018

Continue Reading About equilibrium price

SearchNetworking
  • CIDR (Classless Inter-Domain Routing or supernetting)

    CIDR (Classless Inter-Domain Routing or supernetting) is a method of assigning IP addresses that improves the efficiency of ...

  • throughput

    Throughput is a measure of how many units of information a system can process in a given amount of time.

  • traffic shaping

    Traffic shaping, also known as packet shaping, is a congestion management method that regulates network data transfer by delaying...

SearchSecurity
  • Common Body of Knowledge (CBK)

    In security, the Common Body of Knowledge (CBK) is a comprehensive framework of all the relevant subjects a security professional...

  • buffer underflow

    A buffer underflow, also known as a buffer underrun or a buffer underwrite, is when the buffer -- the temporary holding space ...

  • single sign-on (SSO)

    Single sign-on (SSO) is a session and user authentication service that permits a user to use one set of login credentials -- for ...

SearchCIO
  • benchmark

    A benchmark is a standard or point of reference people can use to measure something else.

  • spatial computing

    Spatial computing broadly characterizes the processes and tools used to capture, process and interact with 3D data.

  • organizational goals

    Organizational goals are strategic objectives that a company's management establishes to outline expected outcomes and guide ...

SearchHRSoftware
  • talent acquisition

    Talent acquisition is the strategic process employers use to analyze their long-term talent needs in the context of business ...

  • employee retention

    Employee retention is the organizational goal of keeping productive and talented workers and reducing turnover by fostering a ...

  • hybrid work model

    A hybrid work model is a workforce structure that includes employees who work remotely and those who work on site, in a company's...

SearchCustomerExperience
Close