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Equilibrium is a condition that can
- a)never change
- b)change only if some outside factor changes
- c)change only if some internal factor changes
- d)changs only if government policies change
Correct answer is option 'C'. Can you explain this answer?
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Equilibrium is a condition that can a)never change b)change only if s...
Equilibrium and its conditions
Equilibrium refers to a state of balance or stability where there is no tendency for change. In economics, it is a situation where the demand for a good/service equals its supply, resulting in a stable price. The condition for equilibrium is described below.
Internal factor change
Equilibrium can change only if some internal factor changes. Internal factors refer to the variables that are within the system being analyzed. For instance, in the market for a good/service, the internal factors are the price, demand, and supply of the good/service. If any of these factors change, it affects the equilibrium condition.
Example
Suppose there is a market for apples, and the equilibrium price is $2 per apple. If there is an increase in demand for apples due to a new health study showing the benefits of apples, it will lead to an increase in the equilibrium price. This is because there will be more buyers willing to pay a higher price for the same quantity of apples. On the other hand, if there is a decrease in supply due to a natural disaster that affects apple orchards, it will lead to a decrease in the equilibrium price. This is because there will be fewer apples available for the same demand, leading to a shortage and higher prices.
Conclusion
In conclusion, equilibrium is a state of balance that can change only if some internal factor changes. It is an essential concept in economics that helps to explain the behavior of markets and prices. Understanding the conditions for equilibrium is crucial for policymakers, businesses, and consumers in making informed decisions.
Equilibrium refers to a state of balance or stability where there is no tendency for change. In economics, it is a situation where the demand for a good/service equals its supply, resulting in a stable price. The condition for equilibrium is described below.
Internal factor change
Equilibrium can change only if some internal factor changes. Internal factors refer to the variables that are within the system being analyzed. For instance, in the market for a good/service, the internal factors are the price, demand, and supply of the good/service. If any of these factors change, it affects the equilibrium condition.
Example
Suppose there is a market for apples, and the equilibrium price is $2 per apple. If there is an increase in demand for apples due to a new health study showing the benefits of apples, it will lead to an increase in the equilibrium price. This is because there will be more buyers willing to pay a higher price for the same quantity of apples. On the other hand, if there is a decrease in supply due to a natural disaster that affects apple orchards, it will lead to a decrease in the equilibrium price. This is because there will be fewer apples available for the same demand, leading to a shortage and higher prices.
Conclusion
In conclusion, equilibrium is a state of balance that can change only if some internal factor changes. It is an essential concept in economics that helps to explain the behavior of markets and prices. Understanding the conditions for equilibrium is crucial for policymakers, businesses, and consumers in making informed decisions.
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Equilibrium is a condition that can a)never change b)change only if s...
Equlibrium changes when external conditions changes
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Equilibrium is a condition that can a)never change b)change only if some outside factor changes c)change only if some internal factor changes d)changs only if government policies changeCorrect answer is option 'C'. Can you explain this answer?
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