Equilibrium
noun · Economics
Definition
The point where quantity demanded equals quantity supplied.
Explanation
At equilibrium there is no shortage or surplus and no pressure for the price to change.
Example
The price at which a market clears.
Common confusion
Equilibrium does not mean prices never change; it can move when curves shift.
Related terms
- DemandThe quantity of a good that buyers are willing and able to buy at each price.
- SupplyThe quantity of a good that sellers are willing and able to sell at each price.
Study guides that use this term
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