The competitive equilibrium model gets its name from the
A)fact that the number of participants eliminated from the market equals the number of new participants.
B)competition between buyers and sellers, each trying to drive the other out of business.
C)competition between buyers and sellers, which establishes a market price equating the amounts people wish to buy and sell.
D)steady-state nature of the model, in which prices can never change.
E)way that the government is trying to balance the market's supply and demand forces.

Question

Quizplus · Accepted Answer

The competitive equilibrium model is based on the assumption that buyers and sellers compete with each other in the market. The model establishes a market price that brings the demand and supply of the product into equilibrium. This is achieved when the amount people wish to buy equals the amount people are willing to sell at a given price. Hence, option C is the correct choice. None of the other options provide an accurate description of the competitive equilibrium model.

The Competitive Equilibrium Model Gets Its Name from the