Business and Economics Journal

Economic Equilibrium Balancing Supply, Demand and Policy

Abstract

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Economic equilibrium is the delicate state where supply and demand intersect, creating stability in markets. It's the point where the quantity demanded by consumers matches the quantity supplied by producers, establishing a fair price and quantity for goods and services. Achieving and maintaining this equilibrium is crucial for the smooth functioning of economies, as it ensures efficient allocation of resources and maximizes societal welfare. However, attaining equilibrium isn't always straightforward, as various factors such as consumer preferences, technological advancements, and government policies influence supply and demand dynamics. In this article, we delve into the mechanisms of economic equilibrium, exploring how markets reach balance and the role of policy interventions in maintaining stability.