Answer
The equilibrium of a market is a situation in which the market price has reached the level at which quantity supplied equals quantity demanded.
Work Step by Step
The equilibrium price is sometimes called the market-clearing price because, at this price, everyone in the market has been satisfied: Buyers have bought all they want to buy, and sellers
have sold all they want to sell.
The actions of buyers and sellers naturally move markets toward the equilibrium of supply and demand. When the market price is above the equilibrium price, there is a surplus of the good, which causes the market price to fall. When the market price is below the equilibrium price, there is a shortage,
which causes the market price to rise.
