Economic Equilibrium in Australia: Report

Added on - 30 Oct 2019

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Running head: ECONOMIC EQUILIBRIUM IN AUSTRALIA1Economic Equilibrium In AustraliaInstutition:Name:
ECONOMIC EQUILIBRIUM IN AUSTRALIA2Economic equilibrium in AustraliaIntroductionFrom our basic knowledge of economics, we know that economic equilibrium is the state atwhich demand and supply forces are equal to each other without external impact the price andquantity remain at the equilibrium value. Thus, the quantity demanded is equal to quantityprovided with no excess in either supply or demand. The price of commodities in this state isknown as the equilibrium price. For there to be equilibrium,the demand for a product at aspecific price need to be equal to the related actual supply or the level of production. The aimof this study is to understand the concepts of a stable equilibrium and discuss the state of theAustralian economy and whether it is a stable economy.ECONOMIC EQUILIBRIUMA stable equilibrium in an economy, it is hard to achieve given the difficulty of getting asituation in which goods and services supplied to meet the market demand. Due to excessdemands, deficits in supplies, unstable market prices, falling incomes and recessions andexpansions in the economy the stability of an economy is not easy to attain.In a stable economy if the rare changes in demand or supply as a result of external factors willlead to a shift in the equilibrium. The changes experienced are to ensure that the equilibrium ismaintained as long as the quantity demanded surpasses the one provided. Given that thesurplus quantity in the market place is to the extent of AB; the price will take a downwardslope. The market will keep feeling the downward pressure until the price encompasses thequantity demanded that must be equal to the level of equilibrium of the quantity supplied. In