is a concept that describes a situation where there is no tendency for change or movement in the market. In other words, it is a state of balance where the quantity supplied is equal to the quantity demanded at a specific price level. In a perfectly competitive market, the market reaches equilibrium when the price is such that quantity demanded equals quantity supplied. If there is a mismatch between supply and demand, it will create a surplus or shortage in the market, causing pressure for prices to adjust until equilibrium is reached.
