Equilibrium
The state in which market supply and demand balance each other and, as a result, prices become stable. Generally, when there is too much supply for goods or services, the price goes down, which results in higher demand. The balancing effect of supply and demand results in a state of equilibrium. Investopedia Says:
The equilibrium price is where the supply of goods matches demand. When a major index experiences a period of consolidation or sideways momentum, it can be said that the forces of supply and demand are relatively equal and that the market is in a state of equilibrium. Related Terms:
Consolidation
Demand
Demand Shock
Disequilibrium
ISLM Model
Market Failure
Market Saturation
Orderly Market
Supply
Supply Shock |