Glossary

Equilibrium

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The equilibrium price of an asset is the price at which supply meets demand. A depth chart is useful for determining where market participants set the relative equilibrium of a particular asset.

Equilibrium is assumed to exist in a state of normal competition amongst firms. A market in equilibrium is characterized by three properties: actors behave rationally, actors behave consistently, and equilibrium is dynamic in response to changes in the market.

➤ Learn more about equilibrium and the efficient market hypothesis.

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