Answer to Question #252379 in Microeconomics for Muskan

Question

Define the equilibrium of a market. Describe the market forces that move a market towards its equilibrium.

Answer 1

Equilibrium is an economic term that describes a situation whereby the market price is stable due to the balancing of supply and demand forces. However, the shortage in supply of the product causes an increase in price as well as a decrease in demand. The forces that move the market to equilibrium are buyers making up the demand side of the market, sellers make up the supply side of the market, therefore as buyers and sellers interact in makes the market moves towards the equilibrium price.