- noun the state in a reversible chemical reaction in which the reaction and its reverse reaction proceed at the same rate and balance each other so there is no further change
- noun the state of balance in the economy where supply equals demand or a country’s balance of payments is neither in deficit nor in excess
- noun a situation in which there is no tendency for people to change what they are doing
- (written as Equilibrium)
In economics, equilibrium is the term used usually to describe the (not necessarily unique) solution to a set of simultaneous structural equa- tions that represent the key relationships in a model of the economy, or part of it such as a specific market. Thus, the equilibrium price and quantity in a simple three-equation model of a market are those at which demand equals supply, there being an equation for demand, another for supply and a third, being the equilibrium condition:
D = a - bP
S = c + dP
D = S
The equilibrium price is thus (a - c)/( d + b). The price at which transactions take place in equilibrium is the same for demanders and suppliers and that the quantity supplied is equal to that demanded. Unless something changes (that is, the ceteris paribus qualifier is violated), these equilibrium values will, granted some side-conditions, be stable, so the system as a whole is in a kind of balance that no market participant has any particular reason to want to change.
- noun a state or situation in which opposing forces or factors balance each other out and stability is attained
- noun within a narrative, the absence of tensions in need of resolution.