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Financial Terms

Equilibrium Price

Equilibrium, in the context of economics, can be understood as the delicate balance between supply and demand. It is the point at which the quantity of goods that consumers are willing to purchase is equal to the quantity of goods that producers are willing to offer. It is a fundamental concept in market analysis and serves as an indicator of market stability. At equilibrium, there is no shortage or surplus of goods, leading to a stable market price. In other words, it is the point of balance in the market where buyers and sellers are in agreement.
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