Written by the Fiveable Content Team • Last updated September 2025
Verified for the 2026 exam
Verified for the 2026 exam•Written by the Fiveable Content Team • Last updated September 2025
Definition
refers to a school of economic thought that emphasizes the idea that markets are self-regulating and tend towards equilibrium through the interactions of supply and demand.
Related terms
Neoclassical economics: A branch of economics that builds upon classical economic principles but incorporates more modern theories and concepts.
Invisible hand: The concept in classical economics that describes how individual self-interest can lead to societal benefit through market mechanisms.
Equilibrium price: The price at which the quantity demanded by consumers equals the quantity supplied by producers in a market.