economic equilibrium models

Economic equilibrium models describe a state where supply (what producers are willing to sell) and demand (what consumers want to buy) balance at a specific price. In this state, the quantity supplied matches the quantity demanded, meaning the market clears without shortages or surpluses. These models help analyze how prices and quantities adjust in response to changes like shifts in consumer preferences or production costs, guiding understanding of market stability and efficiency. Essentially, economic equilibrium is the point where market forces are in harmony, ensuring optimal resource allocation under current conditions.