A price at which quantity demanded equals quantity supplied
A)will cause a shortage or surplus.
B)is an equilibrium price.
C)is affordable by all consumers in the economy.
D)is below the equilibrium price.
E)is above the equilibrium price.

Question

Quizplus · Accepted Answer

An equilibrium price is the price at which the quantity demanded by consumers is equal to the quantity supplied by producers. This creates a balance in the market and results in neither a shortage nor surplus of goods. Options A, D, and E are incorrect because a price that causes a shortage or surplus is not an equilibrium price. Option C is incorrect because an equilibrium price is not necessarily affordable by all consumers in the economy.

A Price at Which Quantity Demanded Equals Quantity Supplied