Economic equilibrium refers to the point in a market where the supply of products or services is equal to the demand for the same products or services. At equilibrium, the quantity produced and the quantity consumed both equal to each other. When the market reaches equilibrium, the buyer and seller both have no incentives to buy or sell more goods or services as there is enough goods and services to meet the individual demands of buyers and sellers in the market.

At equilibrium, a perfect balance is achieved as there are no surpluses or shortages as equilibrium is reached at a point where demand equals supply. Therefore, when equilibrium is met, price and quantity will remain stable, and will give the market the best possible outcome in terms of efficiency and productivity. Furthermore, it is important to note that equilibrium is a self-regulating process in which neither the buyer nor the seller has a motive to change the offering price or quantity.

In addition, economists use the concept of economic equilibrium to analyse several economic models, including the perfect competition model, which is the clearest example of economic equilibrium, and state that as long as there is equilibrium in a market, the economy reaches what is known as a steady state or an efficient way of producing goods and services.

Therefore, it can be concluded that economic equilibrium is a useful concept used to analyse markets and economies in order to improve efficiency. When price and quantity in a market reaches equilibrium, it results in the best possible outcomes in terms of efficiency and productivity as demand and supply become equal and balanced. Furthermore, economic equilibrium is expected to be a self-regulating process, where prices and quantities remain stable, as there is perfect balance in the market.