competitive (adjective, com-pet-i-tive, \ kəmˈpetətɪv \) equilibrium (noun, e-qui-lib-ri-um, \ ˌiːkwəˈlɪbriəm \)
Definition: is a relatively balanced market situation during which neither the buyer nor the seller can enhance its bargaining position and returns due to the predominant price, wage ratios, and the current supply situation. When such equilibrium is reached, the established product price represents the point at which the demanded quantity is equal to the supplied amount. Competitive equilibrium, as an aggregate state, can be used to forecast the equilibrium price that will be set on the market, as well as to more accurately estimate the market’s demand and adapt the company’s supply accordingly.
In a Sentence:
- The ebook industry has reached a competitive equilibrium, with the average price for a novel standing at $5.99. This price point seems to satisfy both the publishing companies and the consumers, as neither has budged from their position for the last six months.
- The management of 2K Web was afraid of a new player appearing on the market, as it would destroy the established competitive equilibrium. Should a new competitor arise, the price will probably be lowered, making it unprofitable for 2K Web to provide its services.
Synonyms and related words: general equilibrium, economic equilibrium, competitive marketing, competitive analysis, equilibrium point
