Equilibrium is the point where supply and demand meet from "summary" of Basic Economics by Thomas Sowell
Equilibrium is a fundamental concept in economics that refers to the point where supply and demand intersect. This point is crucial because it signifies a balance between the quantities of goods or services that producers are willing to supply and the quantities that consumers are willing to purchase. When supply and demand reach equilibrium, there is no surplus or shortage in the market.
In a free market system, prices play a crucial role in guiding this process. As supply and demand shift, prices adjust accordingly to bring them back into balance. For instance, if there is an increase in demand for a product, prices will rise, encouraging producers to supply more of that product. On the other hand, if...
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