Equilibrium

Equilibrium is a state of balance in an economy, and can be applied in a number of contexts. In micro-economics, market equilibrium price is the price that equates demand and supply. In macro-economics, national income is in equilibrium when aggregate demand (AD) equals aggregate supply (AS). Disequilibrium occurs when a variable changes to create an excess of demand or supply, causing a 'movement' to a new equilibrium position. A sudden change is called an economic shock.

Micro-economic equilibrium

equilibrium

Macro-economic equilibrium

national income equilibrium