What usually occurs at equilibrium in a market?

In a market, equilibrium is the point at which the quantity of a good or service that buyers are willing to purchase (quantity demanded) exactly matches the quantity that sellers are willing to provide (quantity supplied). This balance occurs at a particular price known as the equilibrium price, where there is no tendency for the price to change unless there is an external shift in supply or demand.

When the quantity demanded equals the quantity supplied, the market is said to be clear, meaning that there are no surpluses or shortages. Any price above the equilibrium causes excess supply (surplus), as sellers find they cannot sell all their goods at that price, while a price below equilibrium creates excess demand (shortage), as buyers compete to purchase more than what is available. This dynamic ensures that any fluctuations will lead back to the equilibrium point as the forces of supply and demand interact.

Consequently, the state where quantity supplied equals quantity demanded is fundamental to understanding how markets function and is a key aspect of economic theory.