What is the condition for equilibrium in economic terms?

Equilibrium in economic terms is achieved when resources are allocated efficiently, and this happens specifically at the point where marginal benefit equals marginal cost. This condition reflects the balance between the additional utility that consumers gain from consuming one more unit of a good or service (marginal benefit) and the additional cost incurred from producing that extra unit (marginal cost). When these two forces are equal, there is no incentive for consumers to buy more or for producers to create more, as the benefits derived from consumption match the costs associated with production.

This condition ensures that resources are used in the most efficient manner, as producing beyond this point would lead to higher costs than benefits, while producing less would mean not taking full advantage of the potential consumer demand. Thus, achieving this equilibrium is fundamental to optimizing economic welfare.