Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The quantity supplied equals the quantity demanded
B
The price is set above the equilibrium price
C
There is excess supply in the market
D
The quantity demanded exceeds the quantity supplied
Understanding the Answer
Let's break down why this is correct
Answer
At the market equilibrium point in a supply and demand graph, the quantity of goods that consumers want to buy equals the quantity that producers want to sell. This means that the price of the good is just right; not too high or too low. For example, if a store sells 100 apples at $1 each, and at that price, customers are also willing to buy 100 apples, the market is in equilibrium. At this point, there are no shortages or surpluses, which means everyone is happy with the price and quantity. If the price changes, either too high or too low, it will create an imbalance, leading to either a surplus of apples or a shortage.
Detailed Explanation
At the market equilibrium point, the amount of goods that sellers want to sell matches the amount that buyers want to buy. Other options are incorrect because Some might think that a higher price means more profit, but if the price is too high, fewer people will buy; People may believe that excess supply is normal, but it means sellers have more than buyers want.
Key Concepts
market equilibrium
Topic
Analyzing Market Equilibrium
Difficulty
easy level question
Cognitive Level
understand
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