5 Why is the equilibrium price the best deal available for both buyers and sellers? At the price at which the quantity demanded equals the quantity supplied neither buyers nor sellers can do business at a better price. Buyers pay the highest price they are willing to pay for the last unit bought and sellers receive the lowest price at which they are willing to supply the last unit sold.

When people freely make offers to buy and sell and when buyers try to buy at the lowest possible price and sellers try to sell at the highest possible price, the price at which trade takes place is the equilibrium price – the price at which the quantity demanded equals the quantity supplied. The price coordinates the plans of buyers and sellers, and no one has an incentive to change the price.