What is Equilibrium?
- Equilibrium is a situation in which the forces in a system are in balance so that the situation is stable and unchanging.
How Do I Remember It?
- Think of equilibrium as the balance point where things stay the same. It’s like a seesaw perfectly balanced, with neither end moving up or down.
Real World Example
- In a competitive market, the equilibrium price and quantity occur where the demand and supply curves intersect.
- At this point, buyers are willing to purchase exactly the quantity that producers are willing to supply, leading to market stability without any excess supply or demand.
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