What is Meaning Of Equilibrium?

Category: Economics

1Definition

A state where opposing economic forces balance, creating stability in prices and quantities.

2Context

At equilibrium, supply equals demand. Markets naturally tend toward equilibrium.

3Example

When gas prices rise, demand drops and supply increases until equilibrium is reached.

⚠Common Trap

Equilibrium is theoretical—real markets are always adjusting toward it, never quite there.

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