Answer to Question #195829 in Microeconomics for sam

Question

equilibrium point determines what

Answer 1

An equilibrium point is the point where the quantity demanded is equal to the quantity supplied.

In a supply and demand curve, it is the point where the supply curve intersects the demand curve. At this point, the number of goods that consumers want to buy should be equal to the number of goods that sellers want to sell. This leads to a mutually desired amount called equilibrium quantity. The point of equilibrium is a theoretical state of rest in which all economic transactions that "should" occur have occurred, provided the initial state of all related economic variables. The equilibrium point determines the balance of market forces. Economic equilibrium is purely a theoretical concept. The market never reaches equilibrium, even though it is continuously heading in that direction.