What economic concept refers to a state where supply meets demand?

The correct answer is the concept of equilibrium, which describes a state in economics where the quantity of a good or service supplied is equal to the quantity demanded. At this point, the market is balanced, and there is no inherent tendency for the price to change; both consumers and producers are satisfied. This balance means that goods are being produced in amounts that perfectly align with consumer needs and wants at the prevailing price level.

Understanding equilibrium is fundamental in various economic theories, as it serves as a reference point for analyzing market dynamics and predicting how changes in variables such as consumer preferences or production costs may disrupt this balance. When external factors shift demand or supply, the market will tend to move back toward equilibrium through price adjustments, leading to a new balance where supply once again meets demand.