What is described as the situation when the quantity supplied equals the quantity demanded?

The situation when the quantity supplied equals the quantity demanded is referred to as equilibrium. At this point, the market is in balance, meaning that the amount of goods that producers are willing to sell matches the amount that consumers are willing to buy. This balance stabilizes prices, as there is no inherent force prompting either an increase in supply or a decrease in demand, or vice versa.

In an equilibrium state, all parties in the market are satisfied; producers are selling their goods at a price that covers their costs, and consumers are purchasing the goods at a price they are willing to pay. This condition is crucial for understanding how markets function, as it reflects optimal resource allocation.

Surplus and shortage are conditions that arise when there is a mismatch between supply and demand; surplus occurs when supply exceeds demand, while shortage happens when demand exceeds supply. Market failure describes a situation where the allocation of goods and services is not efficient, which can occur for various reasons, but is distinct from the condition of equality between supply and demand.