The Dynamic equilibrium reference article from the English Wikipedia on 24-Jul-2004
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Dynamic equilibrium

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Many processes (such as chemical reactions) are reversible. If, at a given temperature, those two processes occur at the same rate, a dynamic equilibrium will form.

A simple thought experiment;

place a bucket filled with water in a small room. Water from the bucket will evaporate, and the air in the room will start to become saturated with water vapour. Eventually the air will be completely saturated with water, and the level of water in the bucket will stop falling. However, water from the bucket is still evaporating. What is happening is that molecules of water in the air will occasionally hit the surface of the water and condense back into the liquid bulk water, and this occurs at the same rate at which water evaporates from the bucket. This is an example of dynamic equilibrium; the rate of evaporation equals the rate of condensation.

The concept of dynamic equilibrium is not limited to simple changes of state such as that described above. It is often applied to the analysis of chemical reaction kinetics, to obtain useful information about the ratios of reactants and products which will form at equilibrium.

This term can also be used to refer to a steady state (i.e., a state which isn't a true equilibrium, but does not change with time) This can only happen if the system is in contact with an environment which is not in equilibrium.

A Dynamic Equilibrium is a dynamic condition when a liquid and its vapor have reached a point at which the liquid evaporates (sufficient enough kinetic energy to break bonds with liquid and turn into vapor) at the same rate that the vapor condenses (not enough kinetic energy in molecule, so it is re-attracted into the liquid). The rates (amount of molecules evaporating/condensing) of the Equilibrium stay the same at a constant temperature and pressure, but as soon as they change, the rates change as well. The Dynamic Equilibrium first starts when the liquid evaporates into the air above it and fills it up so much that the air cant accept anymore vapor (saturation). This causes condensation back into the liquid form. Dynamic Equilibrium works on a property of reversible change, that is to say, that liquid can evaporate into vapor, but then the vapor can recondense into liquid. This vapor is just liquid that has been heated to a point at which it becomes less dense and escapes the liquid (gas).