•Definition of market equilibrium –The resulting balance between supply and demand is called a market equilibrium. A situation where for a particular good supply = demand. When the market is in equilibrium, there is no tendency for prices to change. We say the market-clearing price has been achieved.
•A market occurs where buyers and sellers meet to exchange money for goods.
•The price mechanism refers to how supply and demand interact to set the market price and amount of goods sold.
•At most prices, planned demand does not equal planned supply. This is a state of disequilibrium because there is either a shortage or surplus and firms have an incentive to change the price.
Market Equilibrium refers to a situation where the goods supplied by producers is equal to the goods demanded by consumers.
Market Equilibrium is important in a market because it allows for a balanced market which allows for the efficient transfer of goods and services.
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