Equillibrium

Equilibrium refers to a state of balance in any system. In economics, equilibrium is an important part of various economic models, notably that of supply and demand. A market is said to be at equilibrium when a price is found at which the demand for a product on the part of buyers is equal to the amount of the product supplied by producers. Presumably, when a point of equilibrium is reached, the price, supply, and demand will remain stable until some change occurs in one of the variables (say, for example, a shortage in a resource required for production); at this point, the system will change until a new point of equilibrium is reached.