Multiple Choice
Suppose the price indicated by p_2 on the graph is above the market equilibrium price. Which of the following must happen to p_2 in order to achieve market equilibrium?
3. The Market Forces of Supply and Demand
Market Equilibrium
Multiple Choice
At market equilibrium, the equilibrium quantity is:
A
the quantity at which demand exceeds supply
B
the quantity where the market price is zero
C
the quantity at which the quantity demanded equals the quantity supplied
D
the quantity at which supply exceeds demand
Verified step by step guidance1
Understand the concept of market equilibrium: it occurs when the quantity demanded by consumers equals the quantity supplied by producers.
Recall that at equilibrium, there is no shortage or surplus in the market, meaning demand and supply are perfectly balanced.
Identify that the equilibrium quantity is the specific quantity where the demand curve intersects the supply curve.
Recognize that if demand exceeds supply, there is a shortage, and if supply exceeds demand, there is a surplus, so neither represents equilibrium.
Conclude that the equilibrium quantity is the quantity at which the quantity demanded equals the quantity supplied.
Related Videos
Related Practice
