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Friday 22 January 2010

Equilibrium

Equilibrium signifies a state of balance between two opposing forces. When two opposite forces interact with each other, the level where their magnitude is equal creates equilibrium in the system. Equilibrium is time specific. Equilibrium can be disturbed by forces acting to disturb the balance.

Equilibrium in Economics is classified into three types:
  1. Partial or General Equilibrium
  2. Short run or long run equilibrium
  3. Stable or unstable equilibrium

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