Competitive Market Equilibrium

Competitive market equilibrium occurs when the supply of a product matches its demand, resulting in a stable price. In this situation, buyers are willing to purchase the same quantity of goods that sellers are willing to sell. It reflects a balance where no participant has the incentive to change their behavior—buyers find the price acceptable, and sellers can sell all they produce. This equilibrium ensures resources are allocated efficiently, as goods are produced in the amounts that people want, and no shortages or surpluses exist in the marketplace.