Which market phenomenon occurs when the quantity demanded and supplied are equal?

When the quantity demanded and supplied are equal, the market is said to be in a state of market equilibrium. This represents a situation where there is no inherent tendency for change; both consumers and producers are satisfied with the price and quantity in the market. At this point, the price reflects the true value of the goods or services being exchanged, as consumers are willing to buy exactly as much as producers are willing to sell.

In this equilibrium state, the forces of supply and demand are balanced, leading to stable prices and quantities in the market. Any deviations from this point, such as surpluses or shortages, indicate that either producers are supplying more than consumers want at a given price, or consumers want more than is being supplied, prompting adjustments in price to restore equilibrium.

Therefore, market equilibrium is a fundamental concept in economics, illustrating the balance between supply and demand, which is crucial for understanding how markets function effectively.