Market Equilibrium

Definition

Market equilibrium refers to the point where the quantity demanded by buyers equals the quantity supplied by sellers, resulting in a balance between supply and demand in a market.

Related terms

Surplus: A situation where the quantity supplied exceeds the quantity demanded, leading to excess supply in the market.

Shortage: A situation where the quantity demanded exceeds the quantity supplied, resulting in insufficient supply in the market.

Price Ceiling: A government-imposed maximum price that prevents prices from rising above a certain level.