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EQUILIBRIUM POINT is one of the fundamental concepts in economics describing the market price of a good or service as being determined by the quantity of both supply and demand for it. In 1890, the English economist Alfred Marshall published his famous work, Principles of Economics. Marshalls graph displays two lines that cross as an "X" with the declining line representing customer demand and the ascending line supply. The intersection of the two lines denotes an EQUILIBRIUM POINT toward which the market price will move to equalize the supply quantity to exactly match the demand quantity. Any higher price above this equilibrium creates a surplus where sellers would inevitably lower their price to sell more of the product. A lower price creates a shortage where sellers would increase price to earn more profit.
AR is Accounts Receivable.
FUNDAMENTAL ANALYSIS is a method used to evaluate the worth of a security by studying the financial data of the issuer. Performing fundamental analysis will teach you a lot about a company, but virtually nothing about how it will perform in the stock market. Apply this analysis on two competing companies or in comparison to its industry and it becomes clearer which the best investment choice is. See FUNDAMENTALS.
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