Multiple Choice
Investors sell stock at the:
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.
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