What is market equilibrium?

Definition of market equilibrium – A situation where for a particular good supply = demand. When the market is in equilibrium, there is no tendency for prices to change. We say the market-clearing price has been achieved. A market occurs where buyers and sellers meet to exchange money for goods.

What determines the equilibrium price in a competitive market?

In a competitive market, demand for and supply of a good or service determine the equilibrium price. MARKETS: Equilibrium is achieved at the price at which quantities demanded and supplied are equal. We can represent a market in equilibrium in a graph by showing the combined price and quantity at which the supply and demand curves intersect.

What is equilibrium price?

The equilibrium price is where the supply of goods matches demand. When a major index experiences a period of consolidation or sideways momentum, it can be said that the forces of supply and demand are relatively equal and the market is in a state of equilibrium. Economists find that prices tend to fluctuate around the equilibrium levels.