Foundations of Economics, 8th Edition

4.3 Market Equilibrium

MyEconLab Concept Video

In everyday language, “equilibrium” means “opposing forces are in balance.” In a market, demand and supply are the opposing forces. Market equilibrium occurs when the quantity demanded equals the quantity supplied—when buyers’ and sellers’ plans are in balance. At the equilibrium price, the quantity demanded equals the quantity supplied. The equilibrium quantity is the quantity bought and sold at the equilibrium price.

Market equilibrium

When the quantity demanded equals the quantity supplied—buyers’ and sellers’ plans are in balance.

Equilibrium price

The price at which the quantity demanded equals the quantity supplied.

Equilibrium quantity

The quantity bought and sold at the equilibrium ...