Define the following terms: (a) Equilibrium, (b) Equilibrium price, (c) Equilibrium quantity, (d) Market equilibrium.

Define the following terms: (a) Equilibrium, (b) Equilibrium price, (c

1.	Define the following terms: (a) Equilibrium, (b) Equilibrium price, (c) Equilibrium quantity, (d) Market equilibrium.
Answer» Solution :(a) In economics, economic equilibrium is a SITUATION in which economic forces such as supply and DEMAND are balanced and in the ABSENCE of external influences the values of economic variables will not CHANGE. (B) Equilibrium price is the price at which quantity demanded is equal to the quantity supplied in the market. (c) Equilibrium quantity is the qunatity at which quantity demanded of a commodity is equal to the quantity supplied. (d) Market equilibrium is a situation where market demand is equal to market supply.