jafnvægisverðs

Jafnvægisverðs, a term originating from Icelandic economics, refers to the equilibrium price within a market. It is the price at which the quantity of a good or service supplied by producers precisely matches the quantity demanded by consumers. At this point, there is no inherent pressure for the price to change, as neither shortages nor surpluses exist.

The concept of jafnvægisverðs is a fundamental principle in microeconomics. It is determined by the interaction of supply and demand curves. The supply curve illustrates the relationship between the price of a good and the quantity producers are willing to offer, typically showing an upward slope. The demand curve, conversely, shows the relationship between price and the quantity consumers are willing to purchase, usually exhibiting a downward slope. The intersection of these two curves visually represents the jafnvægisverðs and the corresponding equilibrium quantity.

When the market price is above the jafnvægisverðs, the quantity supplied exceeds the quantity demanded, leading to a surplus. This surplus puts downward pressure on prices as sellers compete to offload excess inventory. Conversely, if the market price is below the jafnvægisverðs, the quantity demanded exceeds the quantity supplied, resulting in a shortage. This shortage allows sellers to raise prices, moving the market towards equilibrium. Changes in factors affecting supply or demand, such as consumer preferences, production costs, or technological advancements, can shift these curves and consequently alter the jafnvægisverðs.