Answer:
Equilibrium is reached when demand equals supply.
Explanation:
Demand is the amount that consumers want and can buy of a certain product or service in a specific period of time and at a certain price. On the other hand, the supply is the amount that producers want and can sell of a certain product or service in a specific period of time and at a certain price.
In market equilibrium, the quantity demanded of the product or service equals the quantity supplied, so the price also equals. In other words, when market equilibrium is reached, demand and supply are the same, with their corresponding equilibrium price and quantity.
Two situations can occur:
- When the quantity demanded is greater than the quantity supplied, the market is in a situation of excess demand.
- On the other hand, it may happen that the price at which the products are being offered is greater than the equilibrium price and the quantity supplied is greater than the quantity demanded. Then there is an excess supply.
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Equilibrium is reached when demand equals supply.</em></u>
