Market Equilibrium 1.2.3

Market Equilibrium - When there is a balance between demand and supply in a market.

Market demand - The total quantity (volume) demanded for a product in a market by all customers.

Market Supply - The total quantity (volume) of a product supplied to a market by suppliers.

A market is said to be in Equilibrium when there is a balance between demand and supply.

If something happens to disrupt the Equilibrium (e.g. an increase in demand or a decrease in supply) then the forces of demand and supply respond (and price changes) until a new equilibrium is established.

In some markets, the equilibrium point is changing many times a second as demand and supply try to reach a point of balance (e.g. share prices). In other markets there is much less volatility and price changes are less frequent.

For examples, use this link http://www.tutor2u.net/business/reference/market-equilibrium