Equilibrium

Equilibrium theory explains the balance of different, equal, or opposing forces in the dynamics of complex systems in business, as in nature. In application to the marketplace, it is most evident in graphs showing different lines and curves to represent variables of the forces in a steady (ideal) state of balanced interaction. One standard model for market equilibrium is that of supply and demand. Algorithms are the basis for graphing the interdependent quantifiable variables of market equilibrium. In supply-demand models, a unique price exists, called the equilibrium price. The equilibrium price is the fixed point, indicating that the sellers’ supply quantity is equal to the buyers’ demand quantity. Steady equilibrium represents the condition in which the equality of the supply and demand quantities yields no ...