Equilibrium

Definition

Equilibrium in microeconomics is the state where the quantity of goods or services supplied is equal to the quantity demanded by consumers at a particular price. This balance ensures that there is neither a surplus nor a shortage in the market.

Related terms

Demand: The total amount of goods or services that consumers are willing and able to purchase at various price levels.

Supply: The total amount of a specific good or service that is available to consumers at varying price points.

Market Price: The price of a commodity when sold in a given market, determined by the interaction of supply and demand