Multiple Choice
Investors sell stock at the:
117
views
3. The Market Forces of Supply and Demand
Market Equilibrium
Multiple Choice
Refer to Figure 7-9. What is the equilibrium price in the market depicted?
A
The highest price shown on the figure
B
The price at which demand exceeds supply
C
The price at which quantity demanded equals quantity supplied
D
The lowest price at which any sales occur
Verified step by step guidance1
Understand that the equilibrium price in a market is the price at which the quantity demanded by consumers equals the quantity supplied by producers.
Identify the demand curve and the supply curve on the figure (Figure 7-9) to see how quantity demanded and quantity supplied change with price.
Find the point where the demand curve intersects the supply curve; this intersection represents the equilibrium point.
At this intersection, note the corresponding price on the vertical axis; this price is the equilibrium price.
Confirm that at this price, the quantity demanded equals the quantity supplied, meaning there is no shortage or surplus in the market.
Related Videos
Related Practice
