Why does the apple price settle at $10?

Twelve townsfolk want apples. Twelve farmers grow them. Everyone has a price in mind β€” watch what happens when the stand opens at the wrong price, and how it finds the right one.

πŸ§‘β€πŸŒΎπŸŽπŸ§‘ The Apple Stand
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buyers wait here
farmers wait here
$4
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πŸ“ˆ Supply & demand
Demand β€” buyers
Supply β€” farmers
⭐ Equilibrium: $10, 6 apples
Press Play to see today's price on the graph.
Is $4 a fair price?
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Not started yet
πŸ“– The story so far
Waiting for the stand to open…
πŸ€” Why the price settles down
  • Every buyer has a top price they'll pay before they shrug and walk away.
  • Every farmer has a lowest price they'll accept before they'd rather keep their apples.
  • If the price is too low, tons of people want apples but few farmers will sell β€” some buyers go home empty-handed, so next time they offer more.
  • If the price is too high, farmers show up with baskets nobody buys β€” so next time they ask for less.
  • The price stops moving only when the number of people who want to buy exactly equals the number of farmers willing to sell. That's equilibrium β€” everyone who wanted a fair deal got one.