Equilibrium

Definition

Equilibrium refers to a state of balance or stability in an economic system where the quantity demanded equals the quantity supplied. It is the point at which there is no tendency for prices or quantities to change.

Related terms

Surplus: This term refers to a situation where the quantity supplied exceeds the quantity demanded, resulting in excess supply.

Shortage: This term refers to a situation where the quantity demanded exceeds the quantity supplied, resulting in insufficient supply.

Price Elasticity: This term measures how sensitive demand or supply is to changes in price. It helps determine whether changes will have significant impacts on market equilibrium.