What condition describes when both producers and consumers are satisfied with the quantities at market price?

Market equilibrium occurs when the quantity of goods supplied by producers matches the quantity of goods demanded by consumers at a certain price level. At this point, both parties are satisfied because producers are selling their product without holding excess inventory, and consumers are able to purchase the amount they want at that price. In equilibrium, there is no pressure for the price to change, as the market has settled at the price and quantity where demand equals supply.

This condition is important because it highlights the balance in the market, ensuring that resources are allocated efficiently. If the market were to disrupt this equilibrium, either through an increase in supply without a corresponding increase in demand (leading to a surplus) or a decrease in supply with unchanged demand (leading to a shortage), it would create dissatisfaction among one or both parties. Understanding market equilibrium is fundamental in macroeconomics because it encapsulates the interaction between buyers and sellers in a market economy.