What term describes the market price where quantity demanded equals quantity supplied?

The term that describes the market price where the quantity demanded equals the quantity supplied is known as the equilibrium price. This concept is fundamental in economics, as it represents a point in the market where the intentions of buyers and sellers align. At this price, there is no surplus (where supply exceeds demand) and no shortage (where demand exceeds supply).

When the market is at equilibrium, resources are allocated efficiently, and the quantity of goods that producers are willing to sell matches exactly the quantity that consumers are willing to buy. This balance is crucial for ensuring that the market functions smoothly, with neither party experiencing excesses or deficiencies that lead to price fluctuations or imbalances in supply and demand.

Recognizing the equilibrium price helps in understanding how market dynamics operate and how prices can change in response to shifts in either demand or supply. Thus, understanding this term is vital for analyzing market behavior in various economic contexts.