What is the definition of equity in economic terms?

Equity in economic terms refers primarily to the fair distribution of economic benefits among individuals and groups in society. It encompasses the principle of fairness and justice, aiming to ensure that resources and opportunities are available to everyone, particularly to those who may be disadvantaged or marginalized.

This concept contrasts with notions of absolute profit maximization or equal access alone, which may not account for the varying levels of need and opportunity among different members of society. While equal access to resources suggests that everyone has the same starting point, equity recognizes that different individuals may require differing levels of support and resources to achieve similar outcomes. Therefore, the emphasis on fair distribution advocates for an economic system that takes into consideration the relative advantages and needs of individuals rather than solely focusing on the overall efficiency or balance between supply and demand.

Fundamentally, equity underscores the idea that a just economy should support fairness, thus leading to social cohesion and stability, which are essential for a healthy society.