Multiple Choice
At the equilibrium price, quantity demanded equals quantity supplied. Which of the following best describes market equilibrium?
115
views
3. The Market Forces of Supply and Demand
Market Equilibrium
Multiple Choice
In the context of market equilibrium, what is the point called where the supply and demand curves intersect?
A
Price ceiling
B
Equilibrium point
C
Surplus point
D
Shortage point
Verified step by step guidance1
Understand that the supply curve represents the relationship between the price of a good and the quantity producers are willing to supply, while the demand curve represents the relationship between the price and the quantity consumers are willing to buy.
Recognize that the point where these two curves intersect is significant because it indicates a price at which the quantity supplied equals the quantity demanded.
This intersection point is called the equilibrium point, where the market is in balance with no tendency for price to change, assuming other factors remain constant.
At the equilibrium point, there is neither a surplus (excess supply) nor a shortage (excess demand) in the market.
Therefore, the equilibrium point is the price and quantity combination where the intentions of buyers and sellers match perfectly.
Related Videos
Related Practice
