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WAEC Economics 2002 Question 40

Question 40

Price Determination

A market equilibrium exists when

  1. A.no buyer goes home empty-handed.
  2. B.demand and supply are increasing.
  3. C.demand and supply are equal.
  4. D.the price is fluctuating.
Show the answer and explanation

Answer: C (demand and supply are equal.)

Explanation

Equilibrium is where quantity demanded equals quantity supplied, so there is no pressure on price to change.