Market equilibrium
Understand the Problem
The question is asking about market equilibrium, which refers to the state where supply and demand in a market are balanced, resulting in stable prices. It's a fundamental concept in economics.
Answer
Market equilibrium is when quantity demanded equals quantity supplied, stabilizing prices.
Market equilibrium occurs when the quantity demanded equals the quantity supplied at a certain price level, resulting in a stable market condition.
Answer for screen readers
Market equilibrium occurs when the quantity demanded equals the quantity supplied at a certain price level, resulting in a stable market condition.
More Information
In a market equilibrium state, there is neither a surplus nor a shortage of goods. Equilibrium acts as a natural stabilizer, balancing supply and demand.
Tips
Confusing equilibrium with mere balance in supply or demand; it specifically means price and quantity that match both supply and demand.
Sources
- Market equilibrium (article) | Khan Academy - khanacademy.org
- Equilibrium Price: Definition, Types, Example, and How to Calculate - investopedia.com
- Market equilibrium, disequilibrium and changes in equilibrium (article) - khanacademy.org
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