Equilibrium is the state in which market supply and demand balance each other, and as a result prices become stable. Generally, an over-supply of goods or services causes prices to go down, which results in higher demand—while an under-supply or shortage causes prices to go up resulting in less demand.

Market Equilibrium:
Market equilibrium is a state in which the quantity demanded by consumers is equal to the quantity supplied by producers at a particular price level. It is the point at which the forces of demand and supply in a market are balanced, resulting in a stable price and quantity.

Demand and Supply Schedule:
To understand market equilibrium, let's consider a hypothetical market for oranges. The table below represents the demand and supply schedule for oranges at various price levels:

| Price (per orange) | Quantity Demanded | Quantity Supplied |
|-------------------|------------------|------------------|
| $1 | 100 | 50 |
| $2 | 80 | 70 |
| $3 | 60 | 90 |
| $4 | 40 | 110 |
| $5 | 20 | 130 |

Demand Curve:
The demand curve represents the relationship between the price of a good and the quantity demanded by consumers. It is a downward-sloping curve, indicating that as the price increases, the quantity demanded decreases. In our example, the demand curve would be downward sloping, with a negative slope.

Supply Curve:
The supply curve represents the relationship between the price of a good and the quantity supplied by producers. It is an upward-sloping curve, indicating that as the price increases, the quantity supplied also increases. In our example, the supply curve would be upward sloping, with a positive slope.

Market Equilibrium:
The market equilibrium occurs at the point where the demand curve intersects the supply curve. In our example, this occurs at a price of $3 per orange, where the quantity demanded is 60 and the quantity supplied is also 60.

Graphical Representation:
To visually represent the market equilibrium, we can plot the demand curve and supply curve on a graph. The vertical axis represents the price, and the horizontal axis represents the quantity. The point of intersection between the demand and supply curves represents the market equilibrium.

![Market Equilibrium Diagram](

https://www.edurev.in/uploads/answer/1645164/1.png) https://www.edurev.in/uploads/answer/1645164/1.png)

In the diagram above, the demand curve (D) and the supply curve (S) intersect at point E, which represents the market equilibrium. At this point, the price is $3 per orange, and the quantity exchanged is 60. It is the price and quantity at which both consumers and producers are satisfied, and there is no tendency for the price or quantity to change.

Summary:
Market equilibrium is the state of balance in a market where the quantity demanded equals the quantity supplied. It is determined by the intersection of the demand and supply curves. Graphically, it is represented as the point where the two curves intersect on a graph. In the example of the orange market, the equilibrium price is $3 per orange, and the equilibrium quantity is 60 oranges.