Equilibrium Price

Equilibrium price occurs when supply matches demand perfectly, balancing the market. At this point, buyers and sellers exchange goods or services without excess or shortage—neither too much nor too little. It’s a harmonious state where the quantity offered equals the quantity sought, stabilizing prices. Economists view it as the market’s natural resting point, where forces align, ensuring efficient allocation. Any deviation—surplus or deficit—prompts adjustments until equilibrium is restored, reflecting a delicate, ideal balance in economic activity.