In economics, economic equilibrium is a state of the world where economic forces are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. For example, in the standard text-book model of perfect competition, equilibrium occurs at the point at which quantity demanded and quantity supplied are equal. Market equilibrium in this case refers to a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. This price is often called the competitive price or market clearing price and will tend not to change unless demand or supply changes.
Read more about Economic Equilibrium: Properties of Equilibrium, Normative Evaluation, Interpretations, Solving For The Competitive Equilibrium Price, Dynamic Equilibrium
Famous quotes containing the words economic and/or equilibrium:
“One set of messages of the society we live in is: Consume. Grow. Do what you want. Amuse yourselves. The very working of this economic system, which has bestowed these unprecedented liberties, most cherished in the form of physical mobility and material prosperity, depends on encouraging people to defy limits.”
—Susan Sontag (b. 1933)
“They who feel cannot keep their minds in the equilibrium of a pair of scales: fear and hope have no equiponderant weights.”
—Horace Walpole (1717–1797)