equilibrium

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Mathematically, scarcity rent is the shadow price of the physical stock constraint given that a market equilibrium is defined as maximizing the sum of producer and consumer surplus.
These movements along and/or shifts in the supply and demand curves are reflected in the market equilibrium prices and quantities illustrated in Figures 1 and 2.
Since the XOL contract is an efficient, nonredundant security offered on a voluntary basis, the contracts will not distort existing insurance-reinsurance relationships, but will enhance the private market equilibrium by providing the private market with an additional choice of reinsurance that leaves the market at least as well off as without the initiative.
Hence, the market equilibrium of the Southern goods is given by