Answer:
Equilibrium price is determined at a point where market demand is equal to market supply. Other things being equal, equilibrium price increases with an increase in demand and falls with a decrease in demand as shown in the following figure: 
Quantity (units) Diagram Showing Increase and Decrease in Demand In the given figure, DD is the initial demand curve and SS is the supply curve. Initially, the equilibrium point is E. Corresponding to this point, equilibrium price is OP. As demand increases, demand curve DD shifts rightwards to \[{{D}_{1}}{{D}_{1}}\]Supply remaining the same equilibrium point shifts to\[{{E}_{1}}\]. At this point, the equilibrium price is\[O{{P}_{1}}\], which is higher than OP. As demand decreases, demand curve DD shifts leftwards to \[{{D}_{2}}{{D}_{2}}\].Supply remaining the same equilibrium point shifts to \[{{E}_{2}}\].At this point, the equilibrium price is \[O{{P}_{2}}\], which is lower than OF a
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