In the context of the fundamental principles of a free market system, which of the following statements is true of the equilibrium price?
A) It refers to the price at the point where the supply curve and the demand curve intersect.
B) It is the price at which a seller breaks even.
C) It is the point at which the final cost of production equals the price of the raw materials used for a product.
D) It refers to a situation where the cost price of a product is equal to its selling price.

Question

Quizplus · Accepted Answer

The equilibrium price is the price at which the quantity of goods supplied equals the quantity of goods demanded, represented by the intersection of the supply and demand curves in a free market system.

In the Context of the Fundamental Principles of a Free