Explain the concept of market equilibrium.

Economics Supply And Demand Questions



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Explain the concept of market equilibrium.

Market equilibrium is a state in which the quantity of a good or service demanded by buyers is equal to the quantity supplied by sellers at a specific price. At this equilibrium point, there is no excess supply or demand, resulting in a stable market price. The equilibrium price and quantity are determined by the intersection of the demand and supply curves. Any changes in either demand or supply will cause a shift in the equilibrium, leading to a new price and quantity.