Market Clearing (equilibrium) Price

The price at which quantity supplied equals quantity demanded. The equilibrium price is referred to as a market-clearing price, because at this price there is no excess quantity demanded nor excess quantity supplied.

Suppose at a price of U.S.$30 consumers are willing to buy 3 T-shirts and producers are willing to sell 3 T-shirts at U.S.$30. Then U.S.$30 is the market-clearing price. At this price, no individual seller could make himself better off by offering to sell either more or less T-shirts and no individual buyer could make himself better off by offering to buy more or less T-shirts.