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equilibrium

ee-kwuh-LIB-ree-um /ˌiːkwɪˈlɪbriəm/

nounB2GRESATGMATIELTS

formalacademic

A state in which opposing forces or influences are balanced, such as price stability where supply equals demand.

Refers to a balanced state where no internal market force creates pressure for change unless external conditions shift.

The story behind the word. The word entered English in the 17th century from the Latin 'aequilibrium', formed from 'aequus' meaning 'equal' and 'libra' meaning 'scale' or 'balance'. Classical economists adopted the physical metaphor of weighing scales to describe market forces settling at a stable clearing price.

Word relationships

balance: A general term for stability, whereas equilibrium implies exact equalizing of competing physical or economic forces.
stasis: Implies an unhealthy lack of movement or stagnation rather than dynamic balance.

disequilibrium: A state of imbalance where market forces are actively shifting.
instability: A fragile state subject to erratic changes.

Commonly confused with

equity: Equity refers to fairness or ownership value, while equilibrium refers to physical or market balance.

Word family

equilibria (noun): Plural form of equilibrium.
equilibrate (verb): To bring into or reach a balance.

Collocations

market equilibrium
reach equilibrium
restore equilibrium
equilibrium price

Example sentences

"The market reached equilibrium when commodity supply precisely matched consumer demand at twenty dollars per barrel." Market Analysis
"External shocks continuously disrupt global economic equilibrium, forcing central banks to adjust interest rates." Macroeconomics

Memory hook

EQUI (equal) + LIBRI (like Libra scales) = equal balance on the scales. Equal weight on two sides of a scale.

When not to use

Avoid using as a synonym for simple emotional happiness unless referring specifically to psychological balance.

Fun facts

In modern game theory, John Nash extended economic equilibrium to strategic choices, creating the famous 'Nash Equilibrium'.