In this study, the fixed point theory on fuzzy metric spaces has been generalized to the fixed-circle theory by making a geometric interpretation. The necessary conditions to exist the fixed circles of a self-mapping have been investigated and the uniqueness of the circle is examined under suitable conditions. We present some illustrative examples of obtained results and also offer an application to confirm the utility of our established result for finding the unique solution of an integral equation appearing in the dynamic market equilibrium aspects of economics.