MARKET EQUILIBRIUMilib iThditith ti thequilibriumThe condition that exists whenquantity supplied and quantity demanded arelAtilib ithitdfequal. At equilibrium, there is no tendency forprice to change.2 of 46
Equilibrium•Note: Equilibrium is not just where thequantity bought is equal to the quantity sold.This is always true. In order for something tohave been bought it must be sold and viceversa. Therefore this is not a correctd fi i idefinition.•Need curves to be intersecting—at that point,ili d iliquantity supplied is equal to quantitydemanded.3 of 46
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