Short-Run Equilibrium

Definition

Short-run equilibrium refers to the point where the quantity of aggregate output demanded equals the quantity of aggregate output supplied in the short run, resulting in no pressure for firms to change their production levels.

Related terms

Aggregate Demand: The total demand for goods and services in an economy at a given price level.

Aggregate Supply: The total supply of goods and services produced by all firms in an economy at a given price level.

Sticky Prices: Prices that do not adjust immediately to changes in supply or demand, leading to short-run imbalances between aggregate demand and supply.