Explain why equilibrium of supply and demand is desirable.

The Equilibrium point is important as this is the point of consensus. Intersection of the Demand and Supply curve at this point implies that the consumer is willing to pay the price that the producer wishes to charge. This point denotes that both, the consumer and the producer gain benefit and thus the society is benefited by this transaction.

The equilibrium point primarily calculates the price of the product. If the producers plan to sell less than the equilibrium quantity, there will be a condition of dead-weight loss. At this point, the consumer is at a loss because he could have bought a larger quantity at the same price and the producer is at a loss because, at the quantity that he sells, consumer could have paid a greater price but the price will remain P1 only.

Hence, Market equilibrium is desirable in Economics.