Answer to Question #205062 in Macroeconomics for Mable

Question

What is equilibrium

Answer 1

Solution:

Equilibrium refers to a state in which economic or market forces are well balanced. It is the point at which the demand curve and the supply curve intersect each other.

At this point the quantity demanded and quantity supplied are equal or similar in nature. Also, the aggregate demand and aggregate supply in the economy are equal at the equilibrium point. At the equilibrium point, the price is stable and both the producers and consumers are satisfied.