For a market to be at equilibrium, the supply of commodities in that market is equivalent to the commodities' demand. When the market is at equilibrium, the price is considered an equilibrium price, which is the price of products and services when the demand is the same as the supply. Prices do not shift in this market state unless there is an involvement of external factors that alter the demand and supply; thus, disrupting the equilibrium.

Whenever the market is not at an equilibrium state, the market forces tend to move in an equilibrium state. When the market prices are above the equilibrium price, it means that the supply is in surplus (excess market supply) than the demand. Sellers tend to cut on the prices to clear their inventories under these circumstances. They also cut on production to reduce or stop ordering for more inventories; thus, demand increases while supply decreases until they get to equilibrium.

On the other hand, when the prices in the markets are lower than the equilibrium price, there is a supply shortage (excessive demand); thus, buyers bid the prices higher until the products get obtained in short supply. As the prices rise, some buyers won't buy and cut on the demand, or the sellers may be happy to see high demand and may supply more, and the high price pressure will reduce to market equilibrium.