Question 17
Price DeterminationThe equilibrium market price is determined at a point where
- A.consumers can buy all they desire
- B.sellers can dispose of all their wares
- C.the price is moderate
- D.quantity consumers desire equal quantity sellers offer
- E.sellers and buyers are not quarrelling.
Show the answer and explanation
Answer: D (quantity consumers desire equal quantity sellers offer)
Explanation
Equilibrium price is the price at which quantity demanded equals quantity supplied, so the market clears.