Equilibrium in the aggregate demand and supply model consists of a price and a quantity of a product.
Achieving equilibrium requires a combination of rising aggregate supply and falling aggregate demand as the price level for goods rises. When quantities of supply and demand are equal, equilibrium is reached.
Prices, according to economists, frequently oscillate near their equilibrium levels. Market forces will encourage sellers to enter and increase production if the price increases excessively. If the price is too cheap, more bidders will place higher bids. Over time, these actions maintain the relative equilibrium level.
The link between supply and demand is crucial because it helps to establish the costs and availability of the majority of goods and services in a given market. The interplay between supply and demand eventually balances out in accordance with the tenets of a market economy.
Learn more about Equilibrium here:
https://brainly.com/question/13463225
#SPJ4
