Facts about Market Equilibrium tell the readers about an important topic in economics. It occurs due to the balanced condition of economic forces like demand and supply. The equality is found on the quantity of supplies and quantity of demands according to the standard textbook, which represents the perfect competition model. Why don’t you look at the complete post below for details about market equilibrium?
Facts about Market Equilibrium 1: the market price
The market price in market equilibrium is set up according to the amount of good sought by the buyers and the amount of good generated by the sellers.
Facts about Market Equilibrium 2: the term of market price
The market price is often termed as market clearing price or competitive pricing.
Facts about Market Equilibrium 3: the factors
The factors, which affect the market price, are the changes of supply and demands.
Facts about Market Equilibrium 4: the quantity
The quantity in the market equilibrium is called in two terms. Both are market clearing quantity and competitive quantity.
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Facts about Market Equilibrium 5: Nash equilibrium
Nash equilibrium was established by John Nash. The form of Nash equilibrium represents the imperfect competitive market.
Facts about Market Equilibrium 6: the static and dynamic equilibrium
The market equilibrium can be static or dynamic. The former one is spotted in the market where simple microeconomics takes place.
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Facts about Market Equilibrium 7: the changes
The changes on market equilibrium are spotted when the supply and demand are changed. The lower price on the products or services will take place if the supply is increased. The changed supply disrupts the equilibrium. However, most markets will get their new equilibrium. Therefore, the price will not change.
Facts about Market Equilibrium 8: exogenous shift
The changes of tastes and technology are included in the exogenous shift, which may disrupt the demand and supply which lead into the disruption of market equilibrium.
Facts about Market Equilibrium 9: the popularity of Nash equilibrium
The primary alternative to competitive equilibrium is the Nash equilibrium in economics. Cournot duopoly first applied Nash equilibrium. In his 1838 book, Antoine Augustin Cournot developed it.
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Facts about Market Equilibrium 10: a normative meaning
The value judgment or a normative meaning of equilibrium price is cautioned by most economists. This price may be attached when the people are starved. This condition was spotted during the Great Famine in Ireland where people re-laid on the consumption of potatoes.
What do you think on facts about market equilibrium?